Is there really a 4 year Bitcoin cycle?

The 4 year cycle of Bitcoin is a popular theory to explain and predict Bitcoin's price action. The main arguments behind it, as far as I understand, are the following:

1. Market peaks at late 2013 and 2017
2. Bitcoin mining reward halving every 4 years (PlanB's stock-to-flow model predicts price increase based on this every 4 years).

The 4 year cycle theory isn't without its flaws though. Here are counterarguments against it:

1. Bitcoin market cycles have been getting longer
2. The first market peak occurred in June 2011
3. Bitcoin mining reward halving hasn't occurred exactly every 4 years

Let's flesh out all these counterarguments.

1. Market cycles have been getting longer

^{Bitcoin Monthly chart}

You can measure it however you want: bottom to top, halving to top, bottom to bottom, top to top, the end result is the same: they have been getting longer. Are they guaranteed to lengthen? It's not guaranteed of course, but you can make an argument that it is at least somewhat likely.

For our current cycle, the lengthening cycle has been confirmed when it comes to measuring it halving to top. Measuring from market bottom to top remains to be confirmed, but personally I believe we'll see an all-time-high at the end of year or Q1 2022.

2. The first blow off top occurred in June 2011

^{Bitcoin monthly chart}

2013 and 2017 end of year market tops are often used as an argument for having a blow off top in 2021. However, this argument disregards the fact that the first market top occurred in June 2011 which doesn't fit the market top every 4 years theory nor EOY blow off top, if you look all the data. There's no need to have market top every 4 years at the EOY, thinking so is a result of recency bias.

3. Bitcoin mining reward halving hasn't occurred exactly every 4 years

Now this isn't really a counterargument in itself. However, there's something really interesting with the halving dates that explains why people think there's market top every 4 years.

1st. 28th Nov 2012

2nd. 9th Jul 2016

3rd. 11th May 2020

See a pattern?

The halvings have happened about every 4 years, however the exact date has been shifting towards the beginning of the year. The next halving is projected to happen between Feb and May 2024. So it's still shifting, but close enough to every 4 years.

Now, let's look at this picture from mining reward halvings to market top.

^{Bitcoin monthly chart}

From 1st halving it took about 366* days to reach market top in November 2013.

From 2nd halving it took about 525* days to reach market top in December 2017.

"How did the tops come EOY even though it took longer to reach market top from the 2nd halving".

The halving dates. There was a big shift towards the beginning of the year from November to July in 2012 to 2016. The EOY tops were merely a coincidence as a result of shifting halving date.

For the current cycle the confirmed length from halving to top is 546 days*, but I believe it is going to get longer. This will be confirmed if another all-time-high for Bitcoin will come sometime in the following months.

^{* Measured from daily chart}

Change in perspective

Just a month ago I was quite sure about the 4 year cycle, looking at the peaks in 2013 and 2017 on the charts, and I was preparing for a blow off top at the end of 2021, but I've had a complete 180 degree change in perspective in the recent months. Big influences in this have been DataDash and Benjamin Cowen in Youtube, so these ideas aren't original to me. They're probably my two favorite characters – and maybe the most rational – in the crypto space at the moment. What they have to say just makes sense to me. I've looked at the charts myself too, and lengthening cycles is what I see too.

Dubious speculation

In the end, it's all speculation and there's no guarantees which way it'll go. The cycles have been lengthening historically, but that of course isn't necessarily an indication of the future. However, I think it's the most likely course of action that'll play out. In my opinion the 4 year cycle theory doesn't cut it simply because it's based on cherry picked data. Meanwhile lengthening cycles to me seems like the most consistent theory when looking all the data available.

The only scenario 4 year cycle would hold up

Let's say you ignore the lengthening time frames from halvings to market tops and the price action before the first halving – that's just randomness. So now the current cycle's market peak is in 8th of November. If that were to remain as the market top and we would enter a bear market, then you could argue that the 4 year cycle would be in play. Well, I guess you could argue that even January top is still within 4 year cycle theory if we're being generous by giving it a month or two wiggling room. But I think the top will come much later. Not going to speculate about that here though, that's a speculation of another time.

PS. The key to for detecting these long term cycles and trends is using logarithmic scale. With linear scale, the shifts in price in the beginning are virtually undetectable.