Bitcoin’s price movements are far from random. Behind the volatility lies a rhythmic pattern—repeating approximately every four years—that has shaped investor behavior, market sentiment, and long-term price trends. Known as the Bitcoin spiral cycle, this model captures the fractal nature of BTC’s historical performance, driven primarily by the halving event and amplified by human psychology.
This recurring cycle isn’t just about price; it reflects deep structural shifts in on-chain activity, investor sentiment, and market maturity. As we approach the next halving in April 2024, understanding these phases is more critical than ever for traders, long-term holders, and analysts alike.
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The 4-Year Bitcoin Cycle: A Predictable Rhythm
At the heart of Bitcoin’s market dynamics is the four-year cycle, anchored by the block reward halving—an event that cuts miner rewards in half roughly every 210,000 blocks. This built-in scarcity mechanism has historically triggered a sequence of three distinct phases:
- Mature Bull Market (Year 1)
- Bear Market (Year 2)
- Early Bull Market (Years 3–4)
These phases repeat with surprising consistency, forming what analysts call “fractals”—self-similar patterns that recur across cycles. The latest iteration of this model comes from well-known on-chain analyst @therationalroot, who updated his spiral chart to visualize how each cycle aligns in timing, price behavior, and emotional sentiment.
While the first Bitcoin cycle (2009–2012) is often excluded due to lack of reliable price data, the three full cycles since—2012–2016, 2016–2020, and 2020–2024—have followed this triphasic structure with remarkable fidelity.
Phase 1: The Mature Bull Market (~1 Year)
The bull run officially ignites after the halving, though momentum often builds months in advance. This phase typically lasts around one year and culminates in a new all-time high (ATH).
Historically:
- 2013: BTC peaked at ~$1,100 (double top)
- 2017: ~$20,000 (single top)
- 2021: ~$69,000 (double top)
This phase is marked by growing media attention, retail FOMO (fear of missing out), and increasing adoption. On-chain data shows a surge in short-term holder (STH) profits, reflected in indicators like the STH Cost Basis Z-Score, which measures how far current prices are above or below recent acquisition costs.
During this euphoric peak, speculative fervor reaches its zenith—only to be followed by a sharp reversal.
Phase 2: The Bear Market (~1 Year)
Following the ATH, the market enters a painful correction phase. On average, Bitcoin loses about 80% of its value during this downturn. This bear market is not a steady decline but a series of capitulations—sharp drops where panic selling dominates.
Key characteristics:
- Declining trading volumes
- Miner stress and hash rate fluctuations
- Loss of public interest
- Widespread pessimism
Investor psychology shifts from greed to despair. Many retail investors exit the market permanently, believing “Bitcoin is dead.” Yet, this phase is essential—it clears out weak hands and sets the foundation for accumulation.
Capitulation events—typically two or three—signal the end of this phase. These are violent sell-offs followed by stabilization, often coinciding with macroeconomic shifts or regulatory fears.
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Phase 3: The Early Bull Market (~2 Years)
The longest and most overlooked phase spans roughly two years and begins after the macro bottom is established. It's a period of quiet accumulation, where smart money gradually buys dips while public sentiment remains skeptical.
Price action during this phase is characterized by:
- Slow, steady upward movement
- Frequent corrections (15–30% pullbacks)
- Growing on-chain activity from long-term holders
- Rebuilding of network fundamentals
Despite upward momentum, mainstream media remains largely silent. Only those deeply involved in crypto notice the shift. This phase ends with renewed optimism and the return of institutional interest—setting the stage for the next mature bull run.
Currently, Bitcoin is believed to be in Phase 3, which began in early 2023 after bottoming near $15,000. With the next halving expected in April 2024, this accumulation phase could extend into mid-2024 before accelerating into the next bull market.
Fractal Patterns: Price Meets Psychology
What makes the spiral cycle model so powerful is its ability to map not just price, but investor psychology. Each phase corresponds to a dominant emotional state:
| Phase | Emotional Stage |
|---|---|
| Mature Bull Market | Euphoria → Greed → FOMO |
| Bear Market | Denial → Anger → Capitulation → Despair |
| Early Bull Market | Apathy → Hope → Belief |
This emotional arc mirrors the classic Wall Street Market Cycle Psychology model—but compressed into a predictable four-year window. Unlike traditional markets, where cycles are longer and harder to identify, Bitcoin’s algorithmic scarcity creates a clock-like rhythm.
The spiral chart visually reinforces these parallels, using color gradients from red (losses) to green (profits) based on STH Z-Score data. The recurring patterns suggest that while fundamentals evolve, human behavior remains constant.
BTC Price Outlook: $60,000 by Late 2024?
Based on historical patterns, the analyst projects that Bitcoin will reclaim much of its lost ground by the end of 2024.
Here’s the projected trajectory:
- Pre-halving (Q1–Q2 2024): Price stabilizes around $40,000
- Post-halving momentum (H2 2024): Gradual climb to $50,000–$60,000
- Long-term target: Return to ATH levels near $69,000 within 18 months post-halving
So far, Bitcoin has recovered about 30% of its bear market loss—rising from $15,000 to $30,000. The model suggests the remaining 70% recovery will unfold over the next year and a half.
However, external catalysts could alter this timeline:
- Spot Bitcoin ETF approval (e.g., BlackRock): Could accelerate institutional inflows
- Global recession risks: May temporarily disrupt correlation with equities like the S&P 500
As the analyst notes:
“There is no history of Bitcoin being in a recession—it’s difficult to predict how it will respond. If it remains correlated to the S&P 500, a recession might temporarily cause turmoil.”
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Frequently Asked Questions (FAQ)
Q: What drives the 4-year Bitcoin cycle?
A: The primary driver is the block reward halving, which reduces new supply every four years. This scarcity event historically triggers increased demand and upward price pressure over time.
Q: Are Bitcoin cycles guaranteed to repeat?
A: While past cycles show strong fractal similarities, they are not guaranteed. Macro conditions, regulation, and adoption can influence outcomes. However, the halving mechanism ensures cyclical supply shocks remain a core feature.
Q: How do on-chain metrics support cycle analysis?
A: Metrics like the STH Cost Basis Z-Score help identify whether investors are in profit or loss zones. These signals align closely with emotional phases—green zones indicate euphoria; red zones signal capitulation.
Q: Is Bitcoin currently in a bull or bear market?
A: As of early 2025, Bitcoin is in the early bull market phase—a two-year accumulation period following the 2022 bear market bottom. Price consolidation and gradual growth are expected until post-halving acceleration.
Q: Can ETF approvals disrupt the cycle?
A: Yes. A spot Bitcoin ETF could bring forward institutional demand, potentially compressing the cycle or intensifying the next bull run. However, it doesn’t eliminate the underlying halving-driven rhythm.
Q: How reliable are spiral cycle price predictions?
A: Spiral models offer strong historical alignment but should be used alongside other tools. They provide context—not certainty—and work best when combined with on-chain data and macro analysis.
Final Thoughts: History Rhymes, But Doesn’t Repeat Exactly
Bitcoin’s spiral cycles reveal a powerful truth: markets are shaped as much by psychology as by economics. The four-year rhythm—divided into three emotional and financial phases—offers a framework for navigating uncertainty.
While no model is perfect, recognizing where we stand in the cycle can inform better decisions. Whether you're accumulating during apathy or preparing for euphoria, understanding these fractals helps separate signal from noise.
As we move toward the 2024 halving and beyond, one thing remains clear:
The cycle continues—not because of luck, but by design.
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