As institutional participation continues to increase, the market has shown some divergence regarding whether Bitcoin's traditional four-year cycle has failed. However, before key technologies and macro signals are gradually validated, we must return to the cycle itself and assess whether the market has shifted from an upward phase to a correction range. Historical experience indicates that even if the market structure changes, the rhythm of the cycle often does not disappear but continues in a more complex form. The key to this market movement lies not in short-term fluctuations but in whether Bitcoin has deviated from its existing cyclical trajectory.
Demand slowdown and technical breakdown: cyclical downward signals have become concentrated.
The core driving force of Bitcoin's cyclical operation is not the halving event itself, but the changes in demand expansion and contraction. Historically, once demand growth slows, Bitcoin often enters a bear market phase. In the current market, the continuous selling by miners and early holders has largely offset the structural incremental funds brought by ETFs and corporate treasuries, leading to a decrease in market volatility and a clear decline in risk appetite.
On a technical level, key cyclical signals have clearly emerged. Bitcoin's monthly closing price has fallen below the 12-month moving average, a phenomenon that first occurred in November 2025. Looking back at history, this signal has often marked the end of bull market phases and the beginning of adjustment periods. Previously, Bitcoin regained this moving average in December 2022, initiating the current bull market; now, having lost the moving average again, the judgment of cyclical decline has been reinforced.
Political and liquidity cycles dominate the rhythm: midterm election pressures cannot be ignored.
From a higher-level cyclical framework, Bitcoin's four-year operational rhythm is highly synchronized with the U.S. political and liquidity cycles. Historical data shows that midterm election years are typically the stages of the presidential cycle where market pressures are most concentrated. As political uncertainty rises, liquidity tightens, and risk appetite declines, risk assets often come under pressure in advance.
This pattern is particularly evident in Bitcoin's history. In 2014, 2018, and 2022, Bitcoin experienced significant corrections in midterm election-related years. In this cycle, the macro environment corresponding to the 2026 midterm elections has begun to show pressure through factors such as the rising unemployment rate and constrained policy space. Historical experience suggests that during this phase, interest rate cuts often struggle to immediately support risk assets, and their positive effects typically manifest only after growth stabilizes.
Overall, multiple cyclical and structural signals are simultaneously indicating that Bitcoin is entering an adjustment phase. Slowing demand momentum, loss of key technical levels, and the resonance of political and liquidity cycles make the market environment distinctly complex. Unlike past phases driven purely by trends, the current market is shifting from trend-driven to a mode of operation centered on rhythm and structure. In this context, volatility itself will become a new characteristic, providing a more cost-effective range for gradually establishing medium- to long-term positions before the next cycle arrives.
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