Community Trust ScoreVerified
The cryptocurrency market experienced significant declines this week, with Bitcoin dropping more than 9%, Ethereum falling 6%, and XRP plunging 15%. Some altcoins fared even worse. Analysts suggest part of this decline may be linked to traders following the long-observed four-year Bitcoin cycle, a rulebook that historically predicts surges and drops in the market.
The sell-off accelerated after President Trump’s announcement of renewed China tariffs, triggering $19 billion in daily liquidations on October 10, 2025. Prices continued to decline in the days that followed, highlighting ongoing volatility across major digital assets.
Understanding the Four-Year Bitcoin Cycle
Historically, Bitcoin has followed a four-year cycle based on its halving events, when miner rewards are reduced by half. Traditionally, this cycle has seen Bitcoin’s price peak roughly a year after a halving, followed by a decline. This behavior has often influenced altcoins, which tend to mirror Bitcoin’s trends.
For instance, Bitcoin reached an all-time high of $67,000 in November 2021 and subsequently fell over the following months. Traders who strictly follow the four-year cycle often anticipate a decline near the end of such a cycle, which can contribute to sell-offs when prices begin dropping.
Traders Rely on Mechanical Selling
Matthew Nay, a research analyst at Messari, explained that some of the recent market weakness could be due to traders adhering to the four-year cycle. “If you look at the timing, it’s almost exactly four years since we topped last cycle,” Nay said. “With trade war uncertainty added, some participants are defending positions more aggressively.”
Jonathan Morgan, lead crypto analyst at Stocktwits, described the behavior as “mechanical selling” driven by expectations tied to the four-year cycle rather than underlying market fundamentals.
Jasper De Maere, a desk strategist at Wintermute, noted that many retail traders still follow the old cycle-based playbook. “A lot of retail still trades off that pattern: buy before the halving, sell when it doesn’t reach the expected highs,” he said. He added that, in his view, this approach is becoming outdated, as halving events now have a smaller impact on total trading volumes.
Why Experts Believe the Cycle May Be Broken
While some traders rely on the four-year cycle, many analysts argue that the traditional model may no longer hold due to significant shifts in the crypto market. Institutional adoption, the growth of crypto ETFs, and increased use of derivatives have all diminished the influence of miner rewards on market trends.
De Maere emphasized that Bitcoin and the wider crypto space have matured. “The core drivers once used to explain the four-year cycle have just become more irrelevant as BTC and our entire space matures,” he said.
Nay echoed this sentiment, suggesting that Bitcoin could potentially return to all-time highs before the end of 2025 despite the sell-off. Other analysts point out that the cycle may have been disrupted by factors such as a fresh high price achieved before the last halving and the increasing convergence of crypto with traditional finance.
Impact of Recent Liquidations
The market’s recent volatility was intensified by the largest liquidation event in crypto history. On October 10, leveraged positions were wiped out to the tune of $19 billion following news of renewed U.S.-China trade tensions. Wintermute, a prominent market maker, temporarily halted trading due to internal risk controls being triggered amid the sudden price drops.
Morgan explained that in the early days, miner rewards significantly influenced supply and price, making the four-year cycle a reliable predictor. Today, however, institutional flows, ETFs, and derivatives dominate the market, reducing the relevance of halving-based cycles.
Broader Market Implications
While the four-year cycle may still influence some retail traders, the broader crypto market is increasingly shaped by institutional involvement. Large investors and funds are capable of absorbing volatility that would previously have caused sharper declines, potentially decoupling market movements from traditional cycle expectations.
Analysts caution that while mechanical selling can create short-term pressure, the long-term trajectory of Bitcoin, Ethereum, and other major assets may no longer align with the historical four-year pattern. This shift marks a key turning point in the evolution of the cryptocurrency market, where macroeconomic events, policy announcements, and institutional strategies play a more prominent role than cycle-based trading models.
Conclusion
The recent drops in Bitcoin, Ethereum, and XRP highlight the lingering influence of the classic four-year cycle, particularly among retail traders. However, experts suggest that the market has evolved, with institutional adoption and complex financial instruments reducing the impact of historical patterns.
While the four-year cycle remains a reference point for some, its predictive power may be limited in today’s environment. Investors and traders should focus on broader market trends, macroeconomic conditions, and institutional activity when evaluating short-term price movements, as the crypto landscape continues to mature beyond its early, cycle-driven years.
