Is Bitcoin's 4-Year Cycle Dead or Alive in a Liquidity-Driven Market?

The Bitcoin halving event of 2024, which reduced block rewards from 6.25 to 3.125 BTC, reignited debates about the relevance of the cryptocurrency's traditional four-year price cycle. Historically, halvings have been associated with supply-driven scarcity and subsequent price surges. However, 2024's post-halving performance-marked by a 41.2% increase from $64,013 to $90,446 between April and November 2024-fell short of the explosive rallies seen in prior cycles according to analysis. This deviation has sparked a critical question: Is Bitcoin's four-year cycle dead, or has it been supplanted by liquidity dynamics as the new market driver?

The Halving Narrative: A Historical Illusion?

Bitcoin's historical halving cycles-2012, 2016, and 2020-were often framed as catalysts for price discovery, driven by the reduction in new supply. Yet 2024's outcome was muddied by external factors. The release of long-dormant coins-such as those seized by governments and repaid to Mt. Gox creditors-introduced unexpected supply shocks, diluting the scarcity narrative. Meanwhile, the launch of U.S. spot Bitcoin ETFs in January 2024 initially boosted demand but failed to sustain momentum as macroeconomic headwinds and evolving liquidity conditions took precedence according to market analysis.

By 2025, Bitcoin's price action diverged further from historical patterns. Instead of the typical post-halving rally, the market exhibited muted peaks and a lack of broad altcoin season-a phenomenon usually tied to speculative fervor according to on-chain data. This suggests that the four-year cycle, once a cornerstone of Bitcoin investing, is losing its predictive power in a market increasingly shaped by liquidity dynamics.

Liquidity Dynamics: The New Market Driver

Post-2024 halving data reveals a liquidity landscape fundamentally reshaped by hoarding behavior and structural shifts. Daily issuance plummeted to ~900 BTC, creating a supply shock that pushed 74% of circulating BTC into illiquid status (not moved in ≥2 years), while ~75% of coins have remained dormant for over six months according to Glassnode. This hoarding behavior tightens the float, amplifying price sensitivity to even modest demand surges.

On-chain metrics further underscore liquidity's growing influence. The Entity-Adjusted Realized Loss (30D-SMA) and STH Realized Profit/Loss Ratio (0.07x) indicate fading liquidity and demand, with short-term holders facing losses according to MEXC analysis. Exchange outflows, such as Binance's BTC reserves declining from 595K to 544.5K between April and May 2025, signal reduced spot market liquidity and heightened volatility risk according to Glassnode data. Miners, facing compressed profits from rising difficulty and reduced block rewards, have also contributed to short-term selling pressure according to on-chain metrics.

Institutional Adoption and Macro Liquidity

While the halving narrative wanes, institutional adoption has emerged as a stabilizing force. Regulatory clarity-exemplified by U.S. spot BTC ETF approvals and the EU's MiCA framework-has attracted 94% of institutional investors expressing long-term confidence in blockchain assets according to SSGA research. Bitcoin's role as a macroeconomic hedge has also gained traction, with prices peaking near $109,000 in Q1 2025 amid geopolitical and regulatory volatility.

However, macro liquidity shifts complicate this narrative. Bitcoin's current trading range of $81K–$89K reflects fragile equilibrium, with derivatives usage and cross-market linkages amplifying volatility according to on-chain analysis. The NVT golden-cross at ~1.51 and the S2F model's $248K–$369K range suggest valuation fundamentals remain intact, but liquidity constraints mean even minor imbalances could trigger sharp price swings according to Glassnode data.

The Death of the Four-Year Cycle-or Its Evolution?

Bitcoin's four-year cycle is not dead but evolving. The halving's supply-side impact is no longer the sole driver; liquidity dynamics-shaped by hoarding, institutional flows, and macroeconomic forces-now dominate price action. Investors must adapt by prioritizing on-chain metrics, sentiment analysis, and macroeconomic indicators over rigid cycle-based strategies according to market analysis.

For example, dollar-cost averaging and monitoring STH Realized Profit/Loss ratios can help navigate liquidity-driven volatility according to Gate analysis. Meanwhile, the interplay between ETF inflows and exchange outflows will likely dictate near-term trends, with December options expiry posing a key volatility trigger according to MEXC insights.

Conclusion

Bitcoin's 2024 halving exposed the limitations of the four-year cycle in a liquidity-driven market. While reduced issuance still exerts upward pressure, its impact is now mediated by structural factors like hoarding, institutional adoption, and macroeconomic shifts. Investors who cling to historical patterns risk missing the new reality: Bitcoin's price is increasingly a function of liquidity dynamics, not just supply scarcity. As the market matures, those who embrace this paradigm will be best positioned to navigate the next phase of Bitcoin's journey.