Opinion: Bitcoin is experiencing a "shakeout" rather than the beginning of a bear market, the four-year cycle remains a key factor

The current price of Bitcoin has fallen 22% from the historical high of $109,000 set on January 20th, Trump's inauguration day. Despite investor sentiment falling into the "extreme fear" zone multiple times, cryptocurrency analysts generally believe that the Bitcoin bull market cycle is not over yet. This drop may be a "shakeout"—a sharp fall triggered by long positions closing in concentration, followed by a rapid rebound.

Analysts pointed out that several key technical indicators have turned bearish, sparking speculation about an early end to the bull market. However, Bitcoin's four-year cycle remains a key factor; history shows that corrections during bull market cycles are normal phenomena and this time it is more likely to be a shakeout rather than the beginning of a bear market. The bottom for Bitcoin may form in sync with U.S stocks (especially S&P 500), $72,000 to $73,000 still being key support zones but global bond yields and stock market trends will dictate Bitcoin's next move. Trade war risks have been partially priced in but long-term economic pressure could suppress sentiment.

Nexo analyst Iliya Kalchev stated that although Bitcoin’s four-year compound annual growth rate (CAGR) has dropped to its historical low point of 8%, halving events remain crucial for long-term price trends. The halving in April 2024 will reduce block rewards to 3.125 BTC and since then bitcoin has risen over 31%. Although ETF purchases brought about by institutional adoption over the past year have become major driving forces, halving effects will continue to impact the market.