Cryptocurrency research firm 10x Research has stated that Bitcoin’s long-debated four-year cycle is still valid, but the main dynamic defining this cycle is no longer block reward halving.
Markus Thielen, the company’s Research Director, stated that Bitcoin price movements today are largely shaped by political developments, global liquidity conditions, and election cycles.
According to Thielen, all of Bitcoin’s market peaks in 2013, 2017, and 2021 occurred in the fourth quarter of those years. He argues that the timing of these peaks shows a stronger correlation with US presidential election cycles and increased political uncertainty during election periods, rather than a direct coincidence with halving dates. Thielen notes that the fact that the halving date falls on a different time period in each cycle weakens the determining role of this effect.
The report also noted that despite the Fed’s interest rate cuts this year, Bitcoin has failed to gain strong upward momentum. Thielen stated that institutional investors are now the dominant players in the crypto market, but these investors are behaving much more cautiously in the current environment. He explained that the uncertainty in the Fed’s policy signals and tightening global liquidity conditions have slowed capital inflows, weakening the momentum needed for a sustained price breakout in Bitcoin.
According to 10x Research, unless there is a significant improvement in liquidity conditions, Bitcoin is more likely to continue its tendency to move in a horizontal range and consolidate in the short term. The report suggests that rather than a rapid and parabolic rise, a period in which the market digests the current macroeconomic and political conditions may prevail.
*This is not investment advice.