{"id":865377,"date":"2023-12-12T17:14:07","date_gmt":"2023-12-12T15:14:07","guid":{"rendered":"https:\/\/www.etoro.com\/trading-the-four-year-cycle\/"},"modified":"2025-11-03T13:08:57","modified_gmt":"2025-11-03T11:08:57","slug":"trading-the-four-year-cycle","status":"publish","type":"page","link":"https:\/\/www.etoro.com\/en-us\/crypto\/trading-the-four-year-cycle\/","title":{"rendered":"Trading Bitcoin: The Four-Year Cycle"},"content":{"rendered":"\n

The Bitcoin halving event and subsequent four-year cycle can have a significant impact on prices in the crypto market. As it is a predetermined event that follows set trajectories, traders and investors should formulate strategies in advance.<\/p>\n\n\n\n\n\n\n

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With the Bitcoin halving<\/a> occurring approximately every four years<\/strong> and demonstrating such a strong influence on the price of Bitcoin<\/a>, it is worth studying previous halving events when making strategic decisions. <\/p>\n\n\n\n

There have been three previous halving events<\/strong>, which have demonstrated recurring themes<\/a>. If these trends and price movements repeat themselves in the upcoming Bitcoin halving event, they could potentially present some good trading opportunities.<\/p>\n\n\n\n

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Four-year cycle strategies <\/h2>\n\n\n\n

Bitcoin\u2019s four-year cycle<\/a>, also known as the halving, is one of the blockchain\u2019s most significant events. After the Bitcoin halving (every time 210,000 blocks are created), Bitcoin mining rewards are cut in half. The halving event often increases market volatility<\/e-tip> and significant price fluctuations<\/e-tip>.<\/mark><\/p>\n\n\n\n

This has been the pattern after every four years. To create and implement a strong trading strategy for the four years, it is important to know more about the different stages of Bitcoin\u2019s periodic cycle<\/strong>. Here is more information on how the different cycle phases operate.<\/p>\n\n\n\n

<\/div><\/div>
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Phase<\/strong><\/th>Market reaction<\/strong><\/th><\/tr><\/thead>
Pre-halving<\/strong><\/td>As the halving approaches, media and retail interest rise in anticipation of a new bull market<\/e-tip>. This interest and influx of capital tend to lead to a pre-emptive Bitcoin price increase<\/strong>.<\/td><\/tr>
Post-halving<\/strong><\/td>Like all markets, supply and demand <\/strong>forces ultimately determine Bitcoin\u2019s price. Reducing the supply of new Bitcoins by 50% through halving typically confirms the start of a new bull market<\/a>.<\/td><\/tr>
Parabolic peak<\/strong><\/td>As buying pressure builds and the Bitcoin price rises, euphoria often grows and pushes the price higher<\/strong>. Also, there\u2019s usually additional interest in the wider crypto market as money flows into altcoins<\/a> such as Ethereum<\/a>, Cardano<\/a> and Polygon<\/a>.<\/td><\/tr>
Bear phase<\/strong><\/td>As Bitcoin investors take profits or shy away from the coin\u2019s higher valuation, the price falls<\/strong>. This has happened historically over the previous halving event, and the period is often referred to as the \u201ccrypto bear market\u201d. Sometimes, a bear market<\/e-tip><\/strong> can be temporary; other times, it can last for months or years.<\/td><\/tr>
Accumulation phase<\/strong><\/td>As the price consolidates <\/strong>at a new, lower level, long-term investors will often take the opportunity to \u201cbuy the dip<\/a>\u201d in anticipation of the next Bitcoin halving.<\/td><\/tr><\/tbody><\/table><\/div><\/div><\/figure>\n\n\n\n

Lessons from the 2024 Bitcoin halving <\/h2>\n\n\n\n

Studying the effects of the 2024 halving can offer insights into how a future halving<\/strong> might act as a catalyst for price movements.<\/p>\n\n\n\n

The BTC price chart<\/a> example below demonstrates some of the stages of the four-year cycle more clearly. The 2024 halving took place on April 19, but a pre-halving rally occurred roughly 30 days prior<\/strong>. The pre-halving surge saw Bitcoin setting a high of $70,184 on March 1. <\/p>\n\n\n\n

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For illustration purposes only. Past performance is not an indication of future results.<\/em><\/p>\n\n\n\n

Source: eToro<\/a><\/p>\n\n\n\n

The Bitcoin price saw two huge spikes<\/strong> in the post-halving phase of the cycle, eventually reaching a new all-time high of $76,999 in November 2024.<\/p>\n\n\n\n

Bitcoin spiked <\/strong>again in mid-November after the re-election of Donald Trump as president, this time reaching over $91,000.<\/p>\n\n\n\n

Psychological factors that impact Bitcoin trading decisions<\/h2>\n\n\n\n

To understand exactly how the Bitcoin halving creates a four-year cycle<\/a>, it is important to consider some of the psychological factors<\/strong> that might influence investment decisions.<\/p>\n\n\n\n

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Fear and greed <\/h3>\n\n\n\n

All investors are at risk of feeling fear and greed<\/a> when investing. However, these feelings can be made more intense by the significant returns from some Bitcoin investors during the post-halving price surge. When this happens, it\u2019s called FOMO<\/strong>. <\/p>\n\n\n\n

In crypto, \u201cFOMO\u201d \u2014 otherwise known as the \u201cfear of missing out\u201d <\/strong>\u2014 can cause some investors to chase trends or remain in positions for too long in the hope of making additional profits.<\/p>\n\n\n\n

In addition, when upward trends reverse, criticisms surrounding the viability and longevity of the crypto sector resurface, which can cause increased selling pressure<\/strong>.<\/p>\n\n\n\n

Self-fulfilling prophecies<\/h3>\n\n\n\n

The widespread reporting of the Bitcoin halving process and how it follows a pattern<\/strong> suggests that Bitcoin\u2019s four-year cycle is a self-fulfilling prophecy<\/strong>. This means that the price moves happen, at least in part, because market participants think that they will. <\/strong><\/mark><\/p>\n\n\n\n

There is also a common saying among investors: \u201cBuy the rumour, sell the fact.\u201d<\/strong> Potential upcoming events or changes can be priced into the market before an official announcement is made. This can cause people to take profit following the announcement, forcing prices lower<\/strong>, even if the headline is a positive one. The same can also be said for bad news.<\/p>\n\n\n\n

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Tip:<\/strong> Investors who take a long-term view of Bitcoin\u2019s prospects and resist the temptation to sell positions are called \u201cHODLers\u201d.<\/p>\n<\/div><\/div>\n\n\n\n

Market sentiment factors that impact Bitcoin trading decisions <\/h2>\n\n\n\n

Investor sentiment can influence prices in all markets, including the crypto market. New investors, especially those focused on more traditional asset classes<\/a>, often become more interested in Bitcoin<\/strong> and other cryptoassets<\/a> when the halving is gathering momentum. <\/p>\n\n\n\n

This is no surprise since any market that experiences an inflow of capital will experience upward price movements<\/strong>.<\/p>\n\n\n\n

Speculative investors<\/strong> who are trading during the halving event instead of sticking to the buy-and-hold approach are more likely to be moved out of positions, though. Unlike long-term investors, the higher number of speculative investors <\/strong>in a market can lead to sharp price crashes <\/strong>and increased volatility.<\/p>\n\n\n\n

External impacts on Bitcoin trading decisions <\/h2>\n\n\n\n

Although the Bitcoin halving can have a significant impact on the Bitcoin price and the broader crypto market<\/strong>, other factors also apply.<\/p>\n\n\n\n

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Fundamental analysis factors<\/strong> can influence the price of Bitcoin \u2013 and this has been proven historically. For example, a decision from crypto regulators can potentially influence the general market prices.<\/p>\n\n\n\n

For instance, in 2019, China restricted the trading and mining of Bitcoin<\/strong>, resulting in a significant price crash. Conversely, the relaxation of regulations in other countries has encouraged increased mainstream crypto adoption, which might lead to price changes.<\/p>\n\n\n\n

Final thoughts<\/h2>\n\n\n\n

The Bitcoin halving draws more attention to Bitcoin and the broader crypto market. However, since it is a predetermined event that follows set trajectories<\/strong>, traders should prepare their strategies in advance.<\/p>\n\n\n\n

Nothing is ever guaranteed in the financial markets or with cryptos, though. This is why carrying out research <\/strong>for key crypto events, such as the halving, is one of the golden rules of investing<\/a>.<\/p>\n\n\n\n

Visit the eToro Academy<\/a> to learn how to create trading strategies.<\/p>\n\n\n\n\n\n

FAQs<\/h2>\n\n\n\n
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Will all Bitcoin halvings take place every four years?<\/dt>
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The timing of future Bitcoin<\/a> halving events is determined by the rate at which miners successfully extract new blocks. At its current rate, the halving takes place approximately every four years. However, if the block production rate increases, the halving event will take place sooner.<\/p>\n<\/dd><\/div>\n\n\n\n

Can you day trade bitcoin?<\/dt>
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Yes, it is possible to day trade Bitcoin. This involves opening buy and sell positions on the same day. However, due to the massive volatility<\/a> of the crypto market, traders can lose more than 10% of their investments within a single day.<\/p>\n<\/dd><\/div>\n\n\n\n

How many bitcoins are mined each day?<\/dt>
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On average, 900 new coins are mined on the Bitcoin blockchain<\/a> each day. Using the current reward rate for Bitcoin, this equates to roughly 144 new blocks created every 24 hours.<\/p>\n<\/dd><\/div>\n<\/dl>\n\n\n\n\t\t