Bitcoin’s two-year cycle: A bullish continuation or a market shift?
Historically, Bitcoin operates on a two-year cycle, with bullish phases typically lasting 24 months before corrections occur.
According to Ki, this pattern suggests the current bull run could extend until April 2025, aligning with prior cycles. The data shows Bitcoin’s market cap growth alongside realized cap differences, highlighting both bullish and bearish phases.
Source: X
Notably, BTC’s market cap now exceeds $1 trillion, mirroring the 2021 bull cycle, where a sharp demand-driven rally eventually led to overheated conditions.
The key concern, however, remains demand recovery. If on-chain indicators continue to hover near the bull-bear boundary, a sustained uptrend may require stronger buying pressure.
Ki emphasizes the importance of the next one to two months; insufficient demand could shift indicators into bear market territory, undermining the bullish cycle hypothesis.
Impact of demand and market indicators
At press time, Bitcoin’s price declined to $79,807, down from January’s peak of $109,350. This downturn is due to several factors, including a $1.5 billion hack of Bybit exchange, which reduced investor confidence and caused substantial outflows from spot Bitcoin ETFs.
Additionally, the reintroduction of U.S. tariffs increased demand for the dollar, contributing to Bitcoin’s drop below the 200-day simple moving average.
Analysts stress the importance of the $82,000 support level; failing to maintain it could lead to further declines.
The upcoming months are crucial, as a sustained recovery in demand is needed to reaffirm bullish momentum and prevent a prolonged downturn.
Warning against heavily leveraged bets
In light of recent market volatility, Ki has advised caution for traders considering leveraged positions.
He notes that while a 30% correction within a Bitcoin bull cycle is not uncommon — citing a 53% drop in 2021 followed by a recovery to new highs — current conditions warrant prudence. Ki stated,
“I don’t think going heavy on leveraged directional bets—long or short—is a good move right now, imo.”
The recent increase in taker sell pressure suggests a potential for heightened volatility, making leveraged directional bets risky. Additional data in the coming weeks is crucial to confirm the market’s direction.
If indicators signal a downtrend, a consolidation period around the $77,000 mark could precede any upward movement.
