Bitcoin’s current cycle is Almost all assumptions were challenged Traders rely on this to identify complete market cycles. Prices have been steadily rising over the past two years, but there has been no explosive movement that would signal the end of Bitcoin’s bull phase.
According to an analysis shared on X by cryptocurrency analyst Sycoderic, this disruption is due to structural changes that separate this cycle from the major Bitcoin rally that preceded it. The difference is not psychological or technical in the normal four-year cycle sense.
Liquidity differences in this cycle
Due to the discontinuity between Bitcoin’s current price trend and the past four-year cycle; Questions among crypto analysts Whether the cycle has already peaked or something else is affecting its behavior below the surface.
For example, during the 2020-2021 bull market, Bitcoin’s peak coincided with a period of extreme liquidity expansion. Bitcoin followed a classic parabolic inflow as the liquidity situation reached its most expansive point.
Charts shared by Sykodelic This trend is clearly demonstrated. The liquidity index is quantitative expansion It then fell in line with the 2022 bear market and ultimately ended at the bottom of the bear market.
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Interestingly, the pattern of Bitcoin price movement following the liquidity index has been repeated in previous bullish cycles. This time the structure is reversed. The liquidity index did not peak near Bitcoin’s recent high of $126,000. Instead, liquidity has fluctuated and has only recently begun to stabilize around levels seen at the bottom of the 2022 bear market.
One of the most unusual aspects of this cycle is how far Bitcoin has already come despite limited liquidity support. Sycoderick pointed out that Bitcoin has risen from the $15,000 area to well above $100,000 while global liquidity remains range-bound, a trend that has never been seen before.
Bitcoin/USD. Source: @Sykodelic_ by X
Why was the Parabola delayed instead of being canceled?
The lack of a parabolic surge has led many to speculate that the cycle is nearing exhaustion. But Sycoderick argues the opposite. According to his interpretation of the Global Liquidity Index, Bitcoin has not yet entered the late circulation stage; It is currently bouncing liquidity trough.
While previous cryptocurrency cycles relied heavily on unpredictable capital flows, this cycle relies on new structural sources of demand. Spot Bitcoin ETF includes Introducing a sustained influx of institutional investors; Meanwhile, government-level adoption has changed the role of Bitcoin in crypto investment portfolios.
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Moreover, the AI stock boom led the traditional stock market absorb a lot There will be less liquidity available and fewer funds available to actively rotate into altcoins and the broader crypto market.
The chart shows that liquidity is just starting to turn up. Quantitative tightening will reduce And the liquidity situation begins to increase. The prediction is that once liquidity starts to rise and quantitative easing expands, Bitcoin could start the missing parabolic move. Take it to a new price high.
Featured image created by Dall.E, chart on Tradingview.com
