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Home Cryptocurrency news Bitcoin

How Lengthening Bitcoin Cycles Conflict With Halving Driven Supply Theories

Tony Spilotro by Tony Spilotro
7 months ago
in Bitcoin, Technical analysis
Reading Time: 3min read
bitcoin lengthening halving cycle

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Bitcoin is at a critical junction. A breakout into a new bull market here backs up the stock-to-flow theory and other halving and supply-driven expectations. Others believe in lengthening cycles between each major peak as adoption takes place and volatility decreases.

However, the lengthening cycle theory coming true would essentially put an end to just about all halving-based theories instantly. Here’s why.

Cryptocurrency Adoption Curve Could Lead To Longer Market Cycles

The leading cryptocurrency by market cap has been consolidating below resistance for months now. The sideways trading range has left the asset dropping to the lowest levels of volatility it can reach.

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When the notoriously volatile asset reached this low of volatility, an enormous over 50 to 80% move follows. The entire crypto market is watching and waiting for whatever comes next. It’s just taking a lot longer than expected and leading to boredom.

Related Reading | Bollinger Band Contraction Could Send Bitcoin Flying 50% Or More

Volatility may even drop further over time, as adoption takes place. As Bitcoin’s market cap grows and so does liquidity, relatively volatility should continue to decline.

This lowering in volatility also comes alongside a lengthening bear and bull cycle, with a longer duration between peaks. Several highly accurate crypto analysts are proponents of this theory, based on the asset’s logarithmic growth curve.

As price action travels along the curve, volatility decreases creating a more stable Bitcoin over time. It will take decades for the asset to fully stabilize, but it has continued to do so as time passes. The only issue with this type of theory advocating lengthening Bitcoin cycles is the fact that it is deeply in conflict with supply and halving-based theories.

bitcoin historical volatility

Brave New Coin Bitcoin Liquid Index Weekly | Source: TradingView Via: DavetheWave Twitter

How A Longer Bitcoin Cycle Means Expectations Around The Halving Are Dead Wrong

Bitcoin has only been around for just over a decade. Therefore, historical analysis only has a small sample at which to draw from. There has only been one major bear market, and we’re amidst or potentially at the end of the second.

The last bear market ended when Bitcoin’s halving passed. The halving reduces the block reward miners receive for securing the network.

As the already limited supply gets further reduced, the theory is that demand begins to outweigh available supply and the asset’s price rises. The stock-to-flow model measures the asset’s relative scarcity based on its supply, points to a new bull market coming any day now.

Technicals also point to a new uptrend forming, but advocates of the lengthening cycle theory are expecting another year of consolidation at least before the bull market breakout occurs.

Related Reading | Data: Bitcoin Is In Accumulation, and That Means $10k Could Soon Break

While this would be disappointing for crypto investors, it would likely be healthier for Bitcoin in the long run. However, it certainly would put an end to any theories that each halving fuels each bull market.

This is because the halving arrives every four years, and the BTC supply gets further reduced. A bull market may have started in 2016 following the last halving, and history does often repeat. But a lengthening cycle is also a very real possibility.

Whatever the case and trajectory, crypto investors should soon find out once this current trading range breaks. A breakdown would put an end to theories suggesting the halving is the catalyst and would give more credence to lengthening cycles.

Tags: bitcoinbtcbtcusdBTCUSDTcryptoxbtxbtusd
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellent. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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