Analysts Say Bitcoin is Undergoing a ‘Shakeout,’ Not the Conclusion of Its 4-Year Cycle

Despite significant concerns among investors regarding the current market downturn, Bitcoin’s historic bull cycle appears to remain on track, with analysts indicating that this might merely be a temporary “shakeout” before the market rallies again.

Currently, Bitcoin’s (BTC) price has decreased by 22% from its all-time peak of over $109,000 achieved on January 20, coinciding with the inauguration of US President Donald Trump, according to data from Cointelegraph Markets Pro.

Even though investor sentiment has occasionally dipped into “Extreme Fear,” historical chart patterns indicate that this may just be a price shakeout — a rapid decline in price resulting from many investors selling off their positions, typically followed by a swift recovery.

“Several key technical indicators have turned bearish, raising doubts that the bull cycle may be concluding prematurely,” Bitfinex analysts shared with Cointelegraph.

“Nevertheless, Bitcoin’s four-year cycle continues to be a significant factor that historically shapes price movements,” the analysts remarked, adding:

“Corrections during bull cycles are typical, and historical trends imply that this could be a shakeout rather than the beginning of a sustained bear market.”

They further noted that the introduction of US spot Bitcoin exchange-traded funds (ETFs), which have temporarily exceeded $125 billion in total holdings, along with the increasing involvement of institutional investors in crypto, indicates that “the classic cycle appears to be losing relevance.”

Related: Bitcoin requires a weekly close above $81K to prevent downside ahead of FOMC

In a promising sign for Bitcoin’s price action, the cryptocurrency managed a daily close above $84,000 on March 15, marking the first time it has done so in over a week since March 8, as per TradingView data.

However, due to Bitcoin’s correlation with traditional financial markets, BTC may only find a bottom alongside equity markets, especially the S&P 500, the analysts advised, elaborating:

“While the $72,000–$73,000 zone remains a vital support area, the overall market dynamics, particularly global treasury yields and stock market trends, will influence Bitcoin’s next major movement.”

“Trade wars have been somewhat accounted for, but prolonged economic turmoil may still impact sentiment,” they concluded.

Related: Increasing stablecoin supply of $219B suggests mid-bull cycle, not market peak

Bitcoin halving and four-year cycle remain critical for price trends: Nexo analyst

Amid concerns about a potential disruption to the Bitcoin bull market, the four-year cycle and the upcoming Bitcoin halving event are deemed essential for Bitcoin’s price trajectory, according to Iliya Kalchev, a dispatch analyst at Nexo digital asset investment platform.

“Bitcoin’s four-year compound annual growth rate (CAGR) has plummeted to a historic low of 8%, raising questions about the validity of its traditional four-year cycle,” Kalchev informed Cointelegraph, adding:

“While substantial institutional adoption over the last year has provided a considerable boost for Bitcoin, its halving events are expected to have a lasting impact.”

The 2024 Bitcoin halving will lower the Bitcoin network’s block reward to 3.125 BTC per block.

Bitcoin’s price has increased over 31% since its last halving on April 20, 2024, which has been termed the “most bullish” scenario for Bitcoin’s pricing, partly due to the rising institutional appetite for the leading cryptocurrency.

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