Bitcoin Four-Year Cycle Remains Intact as Politics and Liquidity Dominate

• Bitcoin cycle persists, but politics and liquidity now outweigh halving impact.
• US election cycles align closer with Bitcoin peaks than halving timelines.
• Slower liquidity inflows point to consolidation, not a parabolic Bitcoin rally.

Bitcoin’s long-debated four-year market cycle remains intact, but its main drivers have changed, according to new commentary from 10x Research. The company claims that Bitcoin is no longer trading largely on halving. Instead, political cycles and liquidity conditions now dictate price behavior. This shift is indicative of more institutional involvement, as well as more macro controls, in the international markets.

Markus Thielen, 10x Research head of research, expressed this opinion in The Wolf Of All Streets Podcast. He said that allegations of the Bitcoin cycle being broken misunderstood the existing market formation. Thielen stated that the cycle still persists. Thielen stated that the cycle still persists, but it no longer depends on programmed supply cuts of Bitcoin. Timing and direction are now dominated by macroeconomic forces.

Thielen identified the years 2013, 2017, and 2021 as the historical peaks of Bitcoin. Every peak was observed in the fourth quarter. He stated that the pattern is more likely in accordance with US presidential election years in comparison to halving dates. Bitcoin halvings have changed in various months. Bitcoin halvings have occurred in various months, whereas the election cycles display a steady market effect.

Political Shifts and Fed Ambiguity Reshape Bitcoin Market Behavior

A major factor in that trend is political uncertainty. Thielen claimed that one of the biggest fears investors have at times is the possibility of the incumbent president losing seats in Congress. These outcomes decrease the potential of significant policy projects. Markets usually react by reducing risk exposure. The risk asset, Bitcoin, is representative of that change.

He made this statement when the largest cryptocurrency is having difficulties rebounding after the recent rate cut by the Federal Reserve. Reduction in the rate has historically favored the risk assets. According to Thielen, the present environment is not like a previous cycle. Institutional investors now control the crypto markets. Their reactions are more conservative to uncertainty about policy and ambivalent Fed messages.

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There are also weakened liquidity conditions. Thielen observed that the inflows of capital into BTC have decelerated compared to last year. Minor inflows decrease the upward pressure. Bitcoin lacks sufficient liquidity for a sustained breakout. Thielen anticipates price convergence over a parabolic rally.

Bitcoin Cycle Timing Evolves Beyond Traditional Four-Year Models

The change alters the way investors think about the timing of the markets. Thielen encouraged traders to break the habit of anchoring expectations on the halving schedules. He explained that political catalysts are increasingly more important. 

The trends of US elections, fiscal negotiations, and central bank balance sheets give better indicators. These aspects are getting stronger to define the stages of the market.

Other crypto market operations have presented similar arguments. In October, Arthur Hayes, the co-founder of BitMEX, declared that the classical four-year crypto cycle had concluded. He did not associate the change with declining institutional demand. Hayes argued that traders who were using old timing models were taking a risk to misinterpret the market.

Hayes contended that global liquidity has always been the cause of BTC cycles. The bull markets of the past came to an end once monetary conditions tightened. He points out the times of slow liquidity in the US dollar and Chinese yuan. Hayes claims that the halving has been exaggerated as a causal element. He termed it to be more of a happenstance to wider macro trends.

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