Lesson 2
The 4-Year Bitcoin (BTCUSD) Cycle
Position for the 4-year cycle but overlay macro conditions. Halving is necessary but not sufficient for bull market. Best setups: halving + liquidity rising + sentiment washed out.
📊 Indicators mentioned in this lesson (click for details):
Bitcoin (BTCUSD) has followed a ~4-year cycle driven by halving events. Understanding this cycle helps with timing.
The Halving:
Every ~4 years, Bitcoin (BTCUSD)'s block reward is cut in half:
- 2012: 50 BTC (BTCUSD) → 25 BTC (BTCUSD)
- 2016: 25 BTC (BTCUSD) → 12.5 BTC (BTCUSD)
- 2020: 12.5 BTC (BTCUSD) → 6.25 BTC (BTCUSD)
- 2024: 6.25 BTC (BTCUSD) → 3.125 BTC (BTCUSD)
The Typical Pattern:
- Pre-Halving (~12 months before): Anticipation builds, gradual rally
- Post-Halving Year 1: Explosive bull market, 3-10x gains typical
- Year 2: Bear market, 70-85% drawdowns typical
- Year 3-4: Accumulation, ranging, setting up next cycle
The Macro Overlay:
The halving cycle interacts with the ~65-month liquidity cycle:
- 2020: Halving + liquidity cycle trough aligned → massive bull run
- 2024: Halving without clear liquidity trough → more complex
When cycles align, moves are amplified. When they diverge, one must dominate.
The 2024-2025 Setup:
April 2024 halving + potential liquidity improvement + ETF demand = bullish setup. But if macro turns hostile, even halving won't save BTC (BTCUSD) from drawdowns.
Check your understanding
Lesson Quiz
Quiz Check
What is the typical pattern after a Bitcoin (BTCUSD) halving?