Believe it or not: the 4-year cycle influences the Bitcoin price
Those of you who trade in crypto undoubtedly know that there is one sacred question that can determine whether your portfolio shoots to the moon or crashes to the bottom.
The question is: when is it the turn of coins other than Bitcoin to really shine, the moment everyone is waiting for?
But honestly, many people misjudge the timing. It turns out that the answer lies in a pattern. The 4-year cycle repeats itself, believe it or not.
Understanding this cycle is not just theory. It is about gaining a strategic advantage. And to decipher this cycle, we must start at the center. Who else but the king, Bitcoin?
Every 4 years, an event takes place called the Bitcoin halving. Think of it as a planned reduction in supply. Suddenly, the number of new Bitcoins being created is halved. Bitcoin automatically becomes scarcer. And this has always been the spark that ignites the bull run. The pattern is crystal clear: every time a halving occurred in 2012, 2016, and 2020, the price shot up immediately. And guess what, we have just passed the 2024 halving.
History does not always repeat itself exactly, but often follows a similar pattern. Now, when Bitcoin starts to rise, the money doesn’t stop there.
And this is where the fun part begins. There is a trail of money flows that we can follow, like crumbs leading us to a hidden treasure. This map is the key. The money flows according to a predictable pattern.
First, all the big capital goes to the safest cryptocurrency: Bitcoin. As soon as the profits in Bitcoin are secured, investors look for something riskier, but with a higher return.
The money goes to Ethereum, then to other major altcoins, and finally, boom! A craze in small-cap coins and meme coins. Now that is what we call an altcoin season. How do we track this flow of money? Simple, we use one key indicator: Bitcoin Dominance, or BTCD.
Essentially, this indicates the percentage of all money in the crypto market invested in Bitcoin. If this percentage drops, it means that a lot of money is flowing into altcoins.
Think of it as our compass. This is where many novice investors fall into a trap. There is a dangerous myth that Bitcoin must fall before altcoins can rise. That is a big mistake.
A true altcoin season takes place when the Bitcoin price moves sideways, or rises steadily. It is as if Bitcoin is giving altcoins permission to party.
If Bitcoin falls, it drags the entire market down with it, and altcoins will fall even harder. But remember: the toughest trials often come just before the lights go out.
The altcoin season is the peak of euphoria, and that is where the greatest risks lie. So the key question is: how do we know when to stop dancing and find a way out before the music stops? Don’t worry, the market always gives clues. And those signals look like this. If your regular motorcycle taxi driver or even your grandma starts giving you crypto tips, that is a warning sign.
If coins with strange names suddenly rise by thousands of percent without a clear reason, be on your guard. The feeling of “Wow, this time it’s different,” where everyone is so optimistic, is a clear sign that we are approaching the peak.
In this review, we have identified the phases; we know the signals. Now the question is: what should we do? Every season in the crypto market requires a different strategy.
The key to surviving and even making a profit in these cycles is adaptation. You cannot use one strategy for all circumstances.
When the market is quiet, or in a bear market, you accumulate capital. As soon as Bitcoin starts to rise, you follow suit. When you see money moving, you move your profits as well. And most importantly: when everyone gets greedy at the peak of the old season, you must be disciplined enough to start selling.
It is like chess, not a slot machine. If you only want to remember a few things from this discussion, make sure the following points are etched into your memory.
Try to remember these five rules. First: the Bitcoin halving is the beginning. Second: money flows sequentially from Bitcoin to altcoins. Third: you need a stable Bitcoin throughout the entire season, not one whose value plummets.
Fourth: when everyone is euphoric, it is time to be cautious. And fifth, and most importantly: adapt your strategy to the season. Simple, but very effective.
Now it is your turn. What phase do you think we are in right now? Is Bitcoin just starting to warm up, or is a shift to altcoins imminent? ***tok
