Bitcoin faces shakeout amid four-year cycle speculation

Bitcoin’s (CRYPTO:BTC) price has experienced a sharp 22% correction from its all-time high of over $109,000, leading to concerns among investors about the potential end of its historic bull cycle.

However, analysts suggest this downturn is a temporary “shakeout” rather than the start of a prolonged bear market.

The correction has triggered fears as investor sentiment dipped into “Extreme Fear” on multiple occasions.

Bitfinex analysts noted that several technical indicators have turned bearish, fueling speculation about a premature end to the bull cycle.

Despite this, they emphasised that Bitcoin’s 4-year cycle remains intact.

“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," they stated.

Bitcoin’s recent price movements show volatility tied to broader financial markets.

Analysts highlighted Bitcoin’s correlation with equity markets like the S&P 500 and global treasury yields, which could influence its next major move.

Key support levels for Bitcoin are estimated at $72,000–$73,000, with broader economic factors playing a crucial role in shaping sentiment.

The launch of U.S. spot Bitcoin exchange-traded funds (ETFs), which briefly surpassed $125 billion in holdings, has also impacted market dynamics.

Analysts argue that institutional adoption and ETFs may alter traditional Bitcoin cycles but retain their influence on long-term price action.

Bitcoin’s halving event remains critical in determining its trajectory.

The most recent halving in April 2024 reduced block rewards to 3.125 BTC per block and contributed to a 31% price increase since then.

“Although strong institutional adoption has served as a significant tailwind for Bitcoin, its halving events are still expected to exert long-term influence,” Iliya Kalchev from Nexo stated.

Despite uncertainties, historical data suggests that Bitcoin’s current downturn aligns with patterns seen in previous cycles.

Analysts remain optimistic about recovery opportunities, particularly if macroeconomic conditions stabilise.

The cryptocurrency’s resilience continues to attract attention as it navigates through market fluctuations while maintaining its status as an influential asset in global finance.

At the time of reporting, the Bitcoin (BTC) price was $83,168.76.