Bitcoin’s traditional four-year cycle is increasingly being questioned as exchange-traded funds, corporate treasury adoption and broader macroeconomic forces reshape market dynamics. These shifts could ultimately push Bitcoin to new all-time highs by 2026, even if further downside emerges along the way.
For more than a decade, Bitcoin’s price behavior has largely followed a four-year rhythm tied to its halving events. Historically, BTC has peaked roughly 12 to 18 months after each halving, followed by a prolonged bearish phase.
This pattern appeared to repeat after the April 2024 halving. Bitcoin reached a high near $126,200 in October, around eighteen months later, before retreating more than 30%.
Cycle behavior points to rising downside risk
The recent pullback resembles the early stages of past bear markets. Some veteran traders, including Peter Brandt, argue that Bitcoin could experience significantly deeper declines, with downside targets extending toward the $25,000 region if historical patterns continue to play out.
These views suggest that a bearish phase should not be dismissed, even as longer-term structural forces support a more optimistic outlook.
On-chain data shows traders selling at a loss
On-chain indicators also reflect growing stress among market participants. João Wedson, founder of analytics firm Alphractal, highlighted the Spent Output Profit Ratio (SOPR) trend signal, a metric often used to identify transitions between bull and bear markets.
In previous bull cycles, SOPR remained above 1, indicating that coins were being sold at a profit. As markets approached major tops, the metric began to weaken. Near cycle bottoms, SOPR typically fell toward or below 1, signaling widespread loss realization.
As of December, SOPR was trending lower, showing that Bitcoin holders were increasingly selling at reduced profits or outright losses. This behavior aligns with the bearish interpretation of the four-year cycle.
Wedson noted that while some believe Bitcoin’s cycle dynamics have fundamentally changed, on-chain data continues to suggest otherwise. According to him, BTC is still behaving in line with its historical fractal patterns.
Institutions challenge the four-year cycle narrative
Despite bearish signals, several large institutions argue that Bitcoin’s traditional cycle may no longer fully apply. Grayscale Investments recently projected that Bitcoin could reach a new all-time high in the first half of 2026.
The firm cited macroeconomic tailwinds, including currency debasement, rising government debt and a more supportive regulatory environment in the United States. Grayscale emphasized that scarce assets such as Bitcoin could serve as a hedge against long-term risks facing fiat currencies.
Fidelity sees potential for a Bitcoin supercycle
Fidelity echoed this constructive outlook in its 2026 crypto forecast. The firm suggested Bitcoin may be entering a “supercycle,” similar to the extended commodity cycles seen in the early 2000s that lasted for nearly a decade.
According to Fidelity Digital Assets research head Chris Kuiper, a new class of investors is entering the market. Traditional asset managers and institutional investors are allocating capital to Bitcoin at a scale not seen in previous cycles.
He noted that institutional participation remains in its early stages, implying that capital inflows could continue to grow well beyond current levels.
ETFs and treasuries reshape supply and demand
Institutional data supports this view. By December, US-listed Bitcoin ETFs from firms such as BlackRock and Fidelity collectively held more than 1.30 million BTC, worth over $114 billion. This represents a more than 300% increase since their launch in January 2024.
At the same time, public companies now hold over 1.08 million BTC on their balance sheets, an investor category that barely existed before 2020.
As the influence of miners continues to decline with each halving, sustained demand from ETFs and corporate treasuries may be reshaping Bitcoin’s supply-demand balance. These forces could soften the boom-and-bust cycles of the past, potentially extending the current market expansion into a longer-term structural uptrend.
