Bitcoin's four-year cycle ends? A new pattern of global liquidity dominance?

Nakamoto 2025-10-27 16:23 62074人围观 BTC

The four-year cycle model that once accurately predicted the trend of Bitcoin is gradually losing its sacred status under the dual influence of institutional funds and macroeconomics. “I am convinced that Bitcoin will see a 50% drop. ”Tom Lee, co-founder

The four-year cycle pattern that once accurately predicted the trend of Bitcoin is gradually losing its sacred status under the dual influence of institutional funds and macroeconomics.

“I am convinced that Bitcoin will see a 50% drop. ”Tom Lee, co-founder of Fundstrat Global Advisors Co., Ltd., spoke frankly in a recent interview.

The Wall Street analyst known for predicting Bitcoin's movements added that Bitcoin has broken out of its typical four-year cycle, indicating that a "longer cycle" is taking shape.

Tom Lee's views are not unique in the market. As Bitcoin continues to fluctuate at high levels in 2025, once exceeding the $120,000 mark and then repeatedly correcting, the debate over whether its traditional cycle model is still valid is becoming increasingly heated.

1. Cycle theory fades

In the cryptocurrency world, the four-year cycle theory has long been regarded as the norm by believers. This pattern is closely tied to Bitcoin’s halving events, where the block rewards received by miners are cut in half every approximately four years.

Historically, this mechanism has triggered significant supply shocks, propelling Bitcoin into bull markets.

However, this cycle appears significantly different. After the latest halving, Bitcoin experienced five months of sideways trading, rather than the strong rise seen after previous halvings.

BlockBeats news shows that in a conversation on October 25, Tom Lee not only admitted that the four-year cycle was broken, but also emphasized the view that the longer term is taking shape.

From a data perspective, Bitcoin has now officially surpassed the time span from cycle low to high of the previous two full market cycles.

2. Liquidity dominates price

When the impact of the halving factor weakens, what is driving Bitcoin’s new cycle?

Global liquidity is gradually showing its dominant role in Bitcoin prices. Raoul Pal of Global Macro Investor even pointed out that global liquidity can explain 90% of Bitcoin price fluctuations.

Data shows that the three-month annualized growth rate of global liquidity has reached 10.2%, and the annual growth rate is currently 6%. This liquidity expansion correlates closely with Bitcoin price movements.

The U.S. Dollar Index (DXY) exhibits an almost perfect negative correlation with Bitcoin. Bitcoin tends to enter a bear market when the U.S. dollar strengthens ； When the U.S. dollar weakens, Bitcoin starts a new bull market.

The Fed’s monetary policy trends have become the focus of market attention. WolfDAO analysis pointed out that ending quantitative tightening (QT) will reverse the US$2.2 trillion balance sheet contraction since 2022 and release funds into risky assets.

This shift could provide a liquidity catalyst for Bitcoin, pushing it towards a structural rise in the fourth quarter of 2025.

3. Influx of institutional funds

In addition to the liquidity environment, the structural changes in the Bitcoin market itself cannot be ignored.

In the third quarter of 2025, the total inflow of U.S. spot Bitcoin ETF funds reached US$7.8 billion, pushing the cryptocurrency spot trading volume to US$4.7 trillion, a quarter-on-quarter increase of 30.6%.

BlackRock's IBIT has attracted $173 billion in assets alone.

These inflows not only bolster market liquidity but also provide a buffer against short-term volatility as ETFs absorb selling pressure from whale activity and retail traders.

On-chain data shows that institutional investors are gradually accumulating Bitcoin, rather than the hype of retail investors. Spot exchange-traded funds, corporate funds, and various funds are steadily buying and holding Bitcoin for the long term.

Echoing this, retail interest in Bitcoin remains sluggish. Google Trends shows a significant decline in current search interest compared to 2021 levels.

This shows that the market is in a stage of steady expansion rather than a general mania.

4. New cycle, new normal

If the traditional four-year cycle is really broken, what new model might Bitcoin show in the future?

Some analysts believe that Bitcoin is transitioning from a four-year cycle to a five-year cycle, and the next price peak is expected to occur around the second quarter of 2026.

This change has been attributed to profound shifts in the structure of the global economy. Governments are extending debt rollovers, business cycles are lengthening, and the flow of liquidity through the financial system is slowing.

Analysts such as CryptoBirb insist that the traditional cycle is coming to an end. Based on historical data, Bitcoin bull markets typically peak approximately 1,060 to 1,100 days after significant lows.

This pattern suggests a potential cycle peak could be between late October and mid-November 2025.

Market analyst Miles Deutscher pointed out that cryptocurrency traders should adjust their strategies accordingly and focus on short-term opportunities rather than waiting for a predictable halving or a long-term bull market.

5. Changes in investment strategies

Facing the changing market environment, investors need to adjust their strategies.

It is particularly important to re-examine the relationship between Bitcoin and global liquidity. Some analysts believe that at the top of the market, Bitcoin is actually leading global liquidity rather than lagging behind it.

This judgment subverts traditional knowledge. At market bottoms, global liquidity tends to lead Bitcoin ； At the top, Bitcoin reflects the tightening trend of liquidity in advance.

For the current cycle, the pressure to tighten liquidity may not come from the Fed, but from fiscal policy. Expected tariff increases and spending cuts could result in a fiscal squeeze of $505 billion per year, accounting for 1.7% of U.S. gross domestic product.

Investors should take a multi-pronged approach: use derivatives to hedge, diversify liquidity sources, monitor on-chain signals, and balance macro and on-chain data.

Paying attention to wallet activity indicators such as MVRV Z-score and Pi Cycle Oscillator can help predict potential selling pressure.

Although analysts have different views, a consensus is forming: Bitcoin’s pricing mechanism has shifted from a simple halving narrative to a more complex global liquidity-driven model.

With the Federal Reserve's QT policy coming to an end and various central banks entering a new round of easing, for Bitcoin, a new era dominated by institutional funds and macro policies has just begun.

Investors who remain wedded to old cycle theories may miss out on broader growth waves ahead.