Bitcoin’s Run-Up Phase: Are We on the Verge of a Major Price Surge?

The well-documented four-year Bitcoin cycle, driven by halving events, impacts supply and market sentiment. Now in the “Run-Up” phase, Bitcoin historically sees price growth as demand meets limited supply. Despite 2022’s challenges, Bitcoin showed resilience, with renewed optimism and indicators suggesting upward momentum.

Bitcoin Cycles

Bitcoin’s four-year cycle is a structural reality - embedded in market behaviour. As we pass the two-year mark since the last halving, seasoned investors know this is more than a casual checkpoint; it’s a pivotal phase within Bitcoin’s distinctive rhythm. The mid-cycle point has historically marked the transition from recovery to growth, with price action that can accelerate as demand increases against a backdrop of dwindling new supply.

In the current cycle, several factors are converging to make this particularly intriguing. Market sentiment is shifting from skepticism to cautious optimism, while liquidity pressures and on-chain indicators align closely with previous cycles. Analyzing these components, alongside Bitcoin’s unique supply dynamics, gives us a data-driven lens through which to anticipate the next phases of price movement.

Dissecting the Four-Year Cycle: A Structure Rooted in Scarcity

Bitcoin’s four-year cycle is defined by its halving events, which systematically cut the block reward by 50% every four years. This built-in scarcity creates an environment that favors price appreciation as supply dwindles and demand intensifies. The Stock-to-Flow Model visualizes this effect, showing Bitcoin’s decreasing new issuance rate against the existing supply, drawing parallels with other scarce assets like gold.

Historically, each cycle has unfolded in four key stages:

• Accumulation – the post-halving recovery as market participants consolidate positions.
• Run-Up – often marked by an accelerated price surge fueled by new demand and increased awareness.
• Peak – where prices reach all-time highs amid heightened market euphoria.
• Correction – a cooldown as the cycle resets and enters a bear phase.
   

At this halfway point, Bitcoin is entering the Run-Up stage, which has typically brought about its strongest growth periods. Given the historical lag between each halving and subsequent price surges, the next 12-18 months are primed for potentially significant gains.

Revisiting 2022: Bitcoin’s Resilience Through Adversity

The 2022 bear market served as a stress test for Bitcoin, with prices dropping from $20,000 to nearly $15,000 as the collapse of major players like FTX, 3AC, and Celsius sent shockwaves through the market. This period marked not just a price correction but a consolidation of faith among long-term holders, who once again demonstrated resilience in the face of severe volatility.

Following the cycle’s low, Bitcoin rebounded fivefold from its trough, underscoring the structural strength of its cycle and its ability to recover after periods of market-wide panic. For investors, the takeaway was clear: Bitcoin’s cyclicality, though challenging, remains an enduring feature that rewards patience and fortitude.

Sentiment Cycles: Emotional Patterns Within Bitcoin’s Rhythm

Each cycle doesn’t just map onto price; it also tracks shifts in market sentiment. Investor psychology oscillates in tandem with price movements, moving from hope to euphoria, and then from fear to capitulation, before returning to belief. Metrics like Net Unrealized Profit and Loss (NUPL) reflect these sentiment waves, revealing the stages of psychological engagement across each cycle.

Right now, as we settle into the mid-cycle period, sentiment has begun to swing back toward optimism. Following early cycle gains and recent price stabilization, we’re seeing renewed confidence, suggesting that investor psychology is aligning with historical trends—signaling the potential for an extended upward movement as belief gains momentum.

Global Liquidity Dynamics and Bitcoin’s Macro Cycle

Bitcoin’s four-year rhythm is also interwoven with the global liquidity cycle. The Global M2 Money Supply—a key indicator of liquidity—tends to expand and contract in roughly four-year increments, often coinciding with Bitcoin’s bull and bear markets. This interplay between global liquidity and Bitcoin’s supply schedule suggests a symbiotic relationship, where economic expansion and contraction directly impact Bitcoin’s trajectory.

During liquidity contractions, as seen in 2022, Bitcoin tends to face downward pressure, intensifying bear market phases. However, as liquidity expands—typically following economic downturns—conditions improve, providing fuel for Bitcoin’s price recovery and rally phases. As central banks shift back toward expansion, this liquidity injection could provide further support for Bitcoin’s next growth phase.

Tracking the Cycle: Patterns in Time and Price

Historically, Bitcoin’s path from bear market lows to new all-time highs has followed a predictable timeframe. From its cycle bottom, Bitcoin generally takes about 24-26 months to reach previous highs, often peaking around the 35-month mark. This timeline suggests that if past patterns hold, we may be positioned for a significant rally through late 2025, with a subsequent cooldown potentially setting in by 2026.
These cyclical patterns, while not guaranteed, provide a framework for understanding Bitcoin’s movements within its broader cycle. Combining this historical insight with current on-chain data, sentiment analysis, and liquidity trends creates a more nuanced approach to timing market entry and exit points.

Conclusion: Preparing for Bitcoin’s Next Phases

Bitcoin’s four-year cycle remains one of the most intriguing tools for understanding its price dynamics. Yet as we progress through the current cycle, it’s essential to stay attuned to evolving market conditions and real-time data. By integrating a cyclical framework with sentiment metrics, and on-chain indicators, investors can adapt more effectively to shifting market realities.

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Don Kruger, Head of Product - EasyCrypto
@DonKruger_