Bitcoin Bull Cycles: Understanding the Patterns and Anticipating the Next Wave

Bitcoin has gone through several distinct phases since its creation in 2009, each marked by unique market dynamics and different catalysts. These bull cycles are not random phenomena—they follow predictable patterns and respond to well-identified technical, economic, and regulatory factors. Understanding how these cycles work allows investors to better anticipate future movements and position their strategies accordingly.

The Mechanics of Bull Cycles

A Bitcoin bull cycle is characterized by three key elements: prolonged price acceleration, explosive trading volume, and a dominant positive sentiment among investors. Unlike traditional markets, these movements offer potentially exponential returns but also extreme volatility.

Technical indicators like the Relative Strength Index (RSI) and the 50- and 200-day moving averages help identify early rally phases. When RSI exceeds 70 and prices break through key moving averages, it often signals a durable change in momentum. On-chain data complement this analysis: increasing wallet activity, massive inflows of stablecoins onto platforms, and decreasing exchange reserves all indicate growing institutional accumulation.

Bitcoin’s halving events (halving) are major catalysts. Occurring every four years, these events cut mining rewards in half, creating a gradual scarcity. Historically, this supply constraint triggers significant appreciations: the 2012, 2016, and 2020 halvings were followed by rallies of 5,200%, 315%, and 230%, respectively.

2013: The First Speculative Wave

Bitcoin emerged from the financial void in 2013 to reach $1,200 in December, representing a 730% gain from its $145 high in May. This first major surge was driven by several converging factors: exponential media coverage of a new digital asset, the Cypriot banking crisis pushing some savers toward a decentralized solution, and gradual adoption by early tech enthusiasts.

However, this euphoria masked ecosystem fragilities. The collapse of Mt. Gox in 2014—a platform handling 70% of global transactions—triggered a 75% price crash within months. This debacle reminded investors of the risks associated with still-embryonic infrastructure.

2017: The Retail Investor Frenzy

Four years later, Bitcoin was gearing up for its second spectacular act. Jumping from $1,000 in January to nearly $20,000 in December 2017, Bitcoin surged by 1,900%, catapulting it into daily conversations far beyond technical circles.

Several factors fueled this rally: the explosion of Initial Coin Offerings (ICO) attracting millions of new investors seeking miraculous returns, the emergence of more accessible trading platforms facilitating retail purchases, and a self-reinforcing media attention spiral where each price increase generated new coverage, attracting more buyers.

Daily trading volume exploded from less than $200 million at the start of the year to over $15 billion by year-end. But, as with many speculative bubbles, the correction was brutal: an 84% drop brought Bitcoin down to $3,200 in December 2018.

2020-2021: The Era of Institutional Adoption

The third Bitcoin bull cycle followed a very different logic. Starting at $8,000 in January 2020, the rally took Bitcoin to $64,000 in April 2021—a 700% increase driven by a fundamental narrative shift.

The COVID-19 pandemic and emergency monetary measures transformed Bitcoin: from a technological curiosity, it repositioned as “digital gold,” a store of value during economic uncertainty. Major companies like MicroStrategy began integrating Bitcoin into their balance sheets, signaling to institutional investors that this asset deserved serious allocation.

Bitcoin futures and the first Bitcoin ETFs opened new regulated investment channels, allowing pension funds and asset managers to access it without the regulatory complications of direct trading. Institutional inflows exceeded $10 billion that year alone.

2024-2025: A New Era, New Catalysts

The current cycle, which began in 2024, combines lessons from the previous three cycles with major regulatory innovations. The approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) in January 2024 marked a decisive turning point.

Since that approval, over $28 billion have accumulated in these new investment vehicles in 2024, surpassing even historic gold ETF inflows. Giants like BlackRock manage over 467,000 BTC through their IBIT ETF, while the total Bitcoin ETF assets exceed 1 billion BTC collectively.

Bitcoin responded by climbing from $40,000 in January 2024 to $87,130 currently (data as of December 26, 2025), with a peak at $126,080, representing over 200% annual gains. The April 2024 halving reinforced this dynamic by restricting new supply, while the pro-crypto political environment in the US added an extra layer of optimism.

Unlike previous cycles dominated by retail speculation, this cycle is structured around stable institutional capital and a solid market infrastructure. The daily volume of $1.02 billion reflects unprecedented liquidity.

Indicators to Watch for Anticipating the Next Cycle

Advanced Technical Signals

Beyond standard moving averages, investors should observe: the MACD (Moving Average Convergence Divergence) for momentum shifts, historical support and resistance levels, and consolidation patterns followed by breakouts. An RSI remaining above 70 for several weeks—rather than just touching it—indicates sustained buying strength.

Decisive On-Chain Metrics

Blockchain data offers unique transparency: when wallet activity of “holders” (long-term holders) increases while trader activity decreases, it signals institutional accumulation. Net stablecoin inflows onto platforms are particularly revealing—they indicate fresh money waiting to be deployed.

Key Catalytic Events

The next halving scheduled for 2028 will be a crucial element, but before that, global regulatory developments will make a difference. Broader adoption by governments as strategic reserves—inspired by the Bitcoin Act proposed by some US legislators aiming to accumulate 1 million BTC over five years—could create a new class of institutional demand.

Strategic Preparation for Investors

1. Fundamental Education

Understanding how Bitcoin works technically, its value proposition, and its role in a diversified portfolio is essential. Serious resources include Satoshi Nakamoto’s original white paper and regular on-chain analysis.

2. Building a Personalized Strategy

Investment goals vary: some seek quick gains, others build long-term positions. A clear allocation—determined by personal risk tolerance and investment horizon—helps avoid emotional decisions during volatility peaks.

3. Prudent Diversification

While Bitcoin dominates, a balanced allocation including other digital assets and traditional assets reduces systemic risks. A portfolio with 30-50% Bitcoin, complemented by other cryptocurrencies and asset classes, offers protection against extreme volatility.

4. Asset Security

For long-term holdings, hardware wallets (hardware wallets) provide superior protection against hacking risks. They isolate private keys from the internet, virtually eliminating security threats associated with online exchanges.

5. Regulatory Vigilance

Monitoring regulatory developments—especially monetary policy changes, new transparency rules, and decisions by financial authorities—allows adjusting strategies before market movements occur.

6. Behavioral Discipline

Bitcoin’s extreme volatility generates intense emotional cycles: fear during corrections, greed during rallies. Using stop-loss orders and strictly following a pre-established investment plan protects against costly behavioral errors.

7. Tax Implications

Cryptocurrency gains are generally taxable. Keeping detailed records of all transactions—dates, amounts, purchase and sale prices—facilitates compliance with tax obligations.

Future Outlook and Structural Developments

Bitcoin as a Strategic Reserve

Bhutan has accumulated over 13,000 BTC through its sovereign investment mechanisms, while El Salvador holds 5,875 BTC since adopting Bitcoin as legal tender in 2021. If this trend accelerates with broader government adoption, it could create an entirely new class of inelastic demand, fundamentally different from retail speculation or even institutional buying.

Network Technological Innovations

The potential introduction of features like OP_CAT could transform Bitcoin’s capabilities, enabling native DeFi applications and Layer-2 solutions capable of processing thousands of transactions per second. This would position Bitcoin not only as a store of value but as a truly useful financial infrastructure.

Expansion of Financial Products

Beyond spot ETFs, we should see the emergence of actively managed Bitcoin funds, more sophisticated derivatives, and potential integration of Bitcoin into traditional financial indices. Each layer of integration reduces access friction and broadens the potential investor base.

When Will the Next Bull Cycle Occur?

History suggests Bitcoin cycles continue, driven by technical dynamics and external catalysts. While no one can predict exact timing, patterns are clear: halvings every four years, regulatory developments, and macro sentiment shifts serve as reliable reference points.

The next cycle could start within 18-24 months—before the 2028 halving—if macro conditions stabilize and government adoption accelerates. Alternatively, an unforeseen new catalyst could trigger a new wave much earlier.

What remains certain: Bitcoin has consistently demonstrated its ability to recover, evolve, and attract new investor categories. For those who understand the cycles, prepare strategically, and manage risks disciplinarily, each new bull cycle presents an opportunity for sustainable wealth building.

Investors who prepare now—by educating themselves, securing their holdings, diversifying, and staying vigilant—will be best positioned to profit from the next major wave of Bitcoin, whatever form it takes.