Bitcoin’s Four-Year Cycle Is Intact, and the Latest Sell-Off Shows Why

Bitcoin’s (BTC) newest worth correction is reinforcing, slightly than undermining, the long-standing 4-year halving cycle that has traditionally formed the asset’s market conduct, based on a brand new report from Kaiko Research.

The debate carries vital implications for merchants and buyers navigating Bitcoin’s volatility in early 2026.

Bitcoin Is Following Its 4-Year Cycle Amid Sharp Correction

Bitcoin fell from its cycle peak near $126,000 to the $60,000–$70,000 range in early February. This marked a drawdown of roughly 52%.

While the transfer rattled market sentiment, Kaiko argues the decline is totally in step with earlier post-halving bear markets and doesn’t sign a structural break from historic patterns.

“Bitcoin’s decline from $126,000 to $60,000 confirms slightly than contradicts the four-year halving cycle, which has constantly delivered 50-80% drawdowns following cycle peaks,” Kaiko’s information debrief learn.

The report notes that the 2024 halving occurred in April. Bitcoin topped out roughly 12–18 months later, aligning carefully with prior cycles. In previous cases, such peaks have usually been adopted by prolonged bear markets lasting round a yr earlier than the subsequent accumulation part begins. 

Kaiko says the present worth motion suggests Bitcoin has transitioned out of the euphoric post-halving part and into that anticipated corrective interval.

It is value noting that many specialists have previously challenged Bitcoin’s 4-year cycle. They argue that it now not holds in at the moment’s market. In October, Arthur Hayes said the 4-year Bitcoin cycle was over. He pointed as an alternative to international liquidity as the dominant driver of worth actions.

Others have argued that Bitcoin now follows a 5-year cycle rather than a 4-year one. They cite the rising affect of world liquidity circumstances, institutional participation, and broader macroeconomic coverage shifts.

Kaiko acknowledged that structural adjustments, together with spot Bitcoin exchange-traded fund (ETF) adoption, better regulatory readability, and a extra mature DeFi ecosystem, have distinguished 2024-2025 from earlier cycles. Nonetheless, it stated these developments haven’t prevented the anticipated post-peak retracement.

Instead, they’ve modified how volatility manifests. Spot Bitcoin ETFs recorded greater than $2.1 billion in outflows throughout the current sell-off.

This amplified draw back stress and demonstrated that institutional entry will increase liquidity in each instructions, not simply on the means up. According to Kaiko,

“While DeFi infrastructure has proven relative resilience in comparison with 2022, TVL declines and slowing staking flows point out no sector is resistant to bear market dynamics. Regulatory readability has confirmed inadequate to decouple crypto from broader macro danger elements, with Fed uncertainty and risk-asset weak point dominating market path.” 

Kaiko additionally raised the key query now dominating market discussions: the place is the backside? The report defined that Bitcoin’s intraday rebound from $60,000 to $70,000 suggests preliminary help could also be forming. 

However, historic precedent reveals that bear markets typically take six to 12 months and contain a number of failed rallies earlier than a sustainable backside is established.

Kaiko famous that stablecoin dominance stands at 10.3%, whereas funding charges have fallen near zero and futures open curiosity has dropped by about 55%, signaling vital deleveraging throughout the market. Still, the agency cautioned that it stays unclear whether or not present circumstances symbolize early, mid, or late-stage capitulation.

“The four-year cycle framework predicts we needs to be at the 30% mark. Bitcoin is doing precisely what it has accomplished in each earlier cycle, nevertheless it appears many market members satisfied themselves this time can be completely different,” Kaiko wrote.

As February 2026 progresses, market members should weigh each side of this argument. Bitcoin’s subsequent strikes will reveal whether or not historical past continues to repeat or a brand new market regime is taking form.

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