Bitcoin experiencing ‘shakeout,’ not end of 4-year cycle: Analysts

Bitcoin’s historic bull cycle remains intact despite widespread investor concerns over the current downturn, which analysts suggest may be just a temporary “shakeout” before the next upward move in the market.

Bitcoin’s (BTC) price is currently down 22% from its all-time high of over $109,000 recorded on Jan. 20, on the day of US President Donald Trump’s inauguration, Cointelegraph Markets Pro data shows.

Despite investor sentiment dropping into “Extreme Fear” multiple times, historic chart patterns suggest that this may just be a price shakeout — a sudden price drop caused by multiple investors exiting their positions, preceded by a sudden price recovery.

“Several key technical indicators have turned bearish, leading to speculation that the bull cycle may be ending prematurely,” Bitfinex analysts told Cointelegraph.

BTC/USD, 1-year chart. Source: Cointelegraph

“Despite this, Bitcoin’s 4-year cycle remains an important factor, historically shaping price movements,” said the analysts, adding:

“Corrections within bull cycles are normal, and past trends suggest that this may be a shakeout rather than the start of a prolonged bear market.”

However, the launch of the US spot Bitcoin exchange-traded funds (ETFs), which temporarily surpassed $125 billion in cumulative holdings, along with the growing institutional crypto investments, make it “clear that the conventional cycle ceases to exist,” the analysts added.

Related: Bitcoin needs weekly close above $81K to avoid downside ahead of FOMC

In an optimistic sign for price action, Bitcoin staged a daily close above $84,000 on March 15, for the first time in over a week since March 8, TradingView data shows.

BTC/USD, 1-day chart. Source: TradingView 

However, due to Bitcoin’s correlation with traditional financial markets, BTC may only find a bottom along with equity markets, particularly the S&P 500, said Bitfinex analysts, adding:

“While $72,000–$73,000 remains a key support range, the broader market narrative, especially global treasury yields and equity trends, will dictate Bitcoin’s next major move."

“Trade wars have already been priced in, to some extent, but prolonged economic strain could weigh on sentiment,” the analysts added.

Related: Rising $219B stablecoin supply signals mid-bull cycle, not market top

Bitcoin halving and four-year cycle still crucial for price action: Nexo analyst

Despite fears over a disrupted Bitcoin bull market, the four-year cycle, along with the Bitcoin halving event, remain crucial for Bitcoin’s price action, according to Iliya Kalchev, dispatch analyst at Nexo digital asset investment platform.

“Bitcoin’s four-year compound annual growth rate (CAGR) has declined to a record low of 8%, posing questions about whether its traditional four-year cycle remains valid,” Kalchev told Cointelegraph, adding:

“Although strong institutional adoption over the past year has served as a significant tailwind for Bitcoin, its halving events are still expected to exert long-term influence.”

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

BTC/USD, 1-day chart since 2024 halving. Source: TradingView 

Bitcoin price is up over 31% since the last halving occurred on April 20, 2024, which was coined the “most bullish” setup for Bitcoin price, partly because of the growing institutional interest in the world’s first cryptocurrency.

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