After a recent surge, Bitcoin has fallen to the $77,000 level, and blockchain analyst Willy Woo suggests that Bitcoin's traditional four-year market cycle may change in the future.
At this point, Wu, discussing Bitcoin's traditional four-year market cycle, stated that this trend could change soon.
Wu stated that Bitcoin may shift from its four-year price cycle centered on the mining reward halving to a longer market cycle of 6-8 years.
The Impact of Halving on Bitcoin's Price Is Weakening!
Willy Woo noted that Bitcoin's market cycles to date have largely been defined by the halving event, which occurs approximately every four years.
However, the situation could change. At this point, Woo noted that the decreasing amount of new Bitcoin entering circulation relative to the total supply reduces the halving mechanism's impact on price.
Due to the halving of the block reward paid to miners approximately every four years, the rate at which new cryptocurrency enters the market is cut in half.
At this point, Woo notes that the ratio of the annual volume of new Bitcoin to the total supply could decrease from the current level of about 0.8% to around 0.4% in the coming years.
According to Woo, this suggests that the impact of the post-halving supply shock on Bitcoin's price may become increasingly limited compared to previous periods.
Macroeconomics, Not Halving, May Take Center Stage in Bitcoin's Cycle!
Woo suggested that the weakening supply effect caused by the halving may have a more substantial impact on Bitcoin's price cycles than the weakening supply itself.
At this stage, in the analyst's view, Bitcoin's future market cycles may show more parallels with the 6-8 year short-term debt cycles observed in traditional financial markets than with the four-year halving calendar.
Woo's forecast of a 6-8 year cycle and a similar shift can be interpreted as an indication that Bitcoin's bull and bear markets in the future may not be built around halving dates. However, this assessment does not mean that Bitcoin's classic four-year cycle has ended.
The main thesis of Woo's argument is that as the influence of halving-related supply shocks diminishes, Bitcoin's price may become more sensitive to macroeconomic factors.
In this context, it is believed that liquidity conditions, interest rates, credit conditions, and borrowing cycles may play a more significant role in Bitcoin's future market movements.
*This is not investment advice.
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