- Kaiko Research’s latest notes suggest that Bitcoin’s four-year cycle remains intact.
- The recent drawdowns coincide with the expected 50%-80% corrections after a cycle peak.
The overly bearish Bitcoin (BTC) and the overall crypto market structure are strong indications that the four-year cycle remains intact. Kaiko Research, a provider of institutional-grade insights, aligns the existing trend with the 2022 crypto winter.
Bitcoin Four-Year Cycle
The Bitcoin four-year cycle is a predictable market pattern that coincides with BTC’s halving epochs. The halving is a predetermined event in Bitcoin in which the network halves mining rewards every 210,000 blocks, which takes place every 4 years.
Here is a rundown of each phase in the four-year cycle:
- The cycle typically starts with a steady accumulation phase in anticipation of the supply shock brought by each halving.
- Then the halving occurs, triggering a new level of scarcity in BTC’s circulating supply.
- Next is the post-halving surge to a new all-time high (ATH), which typically happens 9 to 18 months after the halving.
- Finally, BTC’s price undergoes a sharp correction, erasing gains but never falling below the previous cycle’s low.
The 2026 Bear Cycle
The last Bitcoin halving occurred on April 20, 2024, at block height 840,000. It reduced Bitcoin mining rewards from 6.25 to 3.125 BTC per block. Hence, applying the cyclical pattern puts 2025 as the expected peak of the event, culminating at an ATH of $126,198.07 in October of that year.
Going forward, 2026 is arguably the corrective phase of the cycle, ushering in the dreaded crypto winter. However, many analysts believe that the growing involvement and influence of institutional players in Bitcoin has broken the four-year cycle into shorter bursts. Bitwise even suggested that the situation has reduced the timeline to a two-year cycle.
Kaiko’s latest report states that the ongoing price correction in Bitcoin and the broader crypto market aligns with the four-year halving cycle. Based on its analysis, the ongoing correction from the ATH above $126,000 to the $60,000-$70,000 range remains consistent with the typical 50%-80% drawdowns following cycle peaks. Moreover, the prevailing investor sentiment mirrors that of the 2022 crypto winter.
Kaiko predicts that a deeper markdown could further pull the price below $60,000. That’s unless a key catalyst builds enough hype to turn things around.
Nevertheless, the silver lining in this scenario is that the continuation of the trend within the halving cycle means BTC is nowhere near a structural break that some alarmists have been spreading.
