With the market recovering gradually, Bitcoin seems to have found stability above the $120,000 price mark after experiencing a pullback on Tuesday from its current all-time high. The ongoing bull market cycle continues to play out strongly compared to previous ones, and analysts believe that this cycle could be the best one yet.
A Historic Reset In Bitcoin Cycle Trend
In an insightful research shared on the social media platform X, Darkfost, a market expert and author, has delved into the long-standing Bitcoin cycle trend. Following his investigation, the expert highlighted a potential shift in the current bull market cycle, which is flagged as cycle 4, from the past ones.
Currently, Bitcoin’s fourth cycle is unfolding unlike any before it, raising the question of whether this could be the first truly different cycle. These shifting dynamics are “rewriting the rules” of Bitcoin’s cyclical behavior, paving the way for a development trajectory that is more sustainable but also possibly even more explosive.
According to the market expert, several crypto analysts predict that the market will experience a -80% to -90% bearish phase as seen in the past. However, certain data suggest a different scenario could unfold in this current cycle. Such development implies that BTC is being built on new foundations of institutional adoption, regulated ETFs, and deep market maturity.
BTC cycle 4 exhibiting a distinct trend | Source: Chart from Darkfost on X
Darkfost highlighted that Bitcoin is changing in front of investors and throughout this cycle. In the meantime, the expert has outlined two key and closely connected phenomena, which include drawdowns and volatility.
In the ongoing bull market cycle, there has been a correction in BTC’s price, exceeding 28% during its bullish phase. Overall, the most drawdowns recorded in this fourth cycle have stayed within a 10% to 20% range.
In contrast, there were several instances of drawdowns of almost 50% between 2020 and 2022. Meanwhile, data reveal that only four corrections have gone beyond 25%, making this cycle the least volatile to date. As a result, the volatility of Bitcoin is at its lowest level, except during the last bear market.
Less Violent Corrections And Rallies This Cycle
The low volatility clearly explains why there have been fewer violent corrections and rallies in this cycle. As volatility declines, Darkfost noted that the standard deviation of Bollinger Bands continues to tighten over time, which is indicative of their growing stability.
Considering this new trend, the expert believes that this cycle is already different in both its structure and dynamics, moving away from the early BTC cycle pattern. A wave of different players often triggers a shift in a cycle trend.
This is evidenced by the rising adoption, increasing favorable regulatory landscape, and shifting investor base, which have highly contributed to the ongoing shift. Large treasuries and institutional players have entered the market, particularly in the United States, and new whales are absorbing the selling pressure from older ones.
BTC trading at $121,288 on the 1D chart | Source: BTCUSDT on Tradingview.com Featured image from Pixabay, chart from Tradingview.com
