The 4-year Bitcoin cycle shows signs of fading... In 2026, the cryptocurrency market will be a liquidity game

According to the latest analysis by Wintermute, the traditional four-year Bitcoin cycle concept is gradually becoming obsolete. Now, what drives market trends is no longer self-fulfilling expectations based on a timetable, but actual liquidity flows and investor interest concentration.

Traditional Time Cycles Are Phasing Out, Capital Flows Are Key

The paradigm of market performance is changing. In the past, expectations that regular bullish and bearish cycles would repeat every four years moved the market. However, this outdated time narrative no longer works. Looking at Wintermute’s OTC liquidity data, the current cryptocurrency market is moving according to capital flows and the direction of investor interest.

2025 clearly demonstrated this. The influx of crypto-native funds significantly weakened, and institutional investment products like ETFs and DATs transformed into a ‘walled garden.’ While these products provided sustained demand for large assets, it meant that this capital was not naturally circulating into broader markets.

2025’s Extreme Concentration… Short Lifespan of Altcoins

As retail investors’ interest shifted to stock markets (especially AI, rare earth elements, quantum technology), the crypto market in 2025 showed an extremely concentrated pattern. This is also clearly reflected in the duration of altcoin rebounds.

In 2024, altcoin rebounds lasted an average of 60 days. However, in 2025, this period shortened to an average of 20 days. Reduced to just one-third of the previous duration. This indicates that market capital is focusing only on major coins, and the flow into a wide range of assets has weakened.

Wealth Effect vs. Capital Stagnation… Three Key Points for 2026

For the cryptocurrency market to break free from this concentration in 2026, at least one of the following catalysts must expand liquidity broadly beyond a few large assets.

The first catalyst is the expansion of ETF and DAT scope. ETF applications for SOL and XRP are already sending early signals. As the scope of investment products expands, capital that is stuck in large assets is likely to flow into a broader altcoin market.

The second is strong performance of mainstream coins. The wealth effect created by the strong rise of Bitcoin or Ethereum could spread across the entire market. If the bullish trend of large assets improves investor sentiment, interest could naturally expand into a wider market.

The third catalyst is a reversal of retail investor interest. Retail investors’ focus, which has been on stocks (AI, rare earths, quantum tech), needs to shift back to cryptocurrencies. When this happens, new capital inflows and increased stablecoin issuance can supply fresh liquidity to the market.

Key Point That Will Decide the Market Direction in 2026

Ultimately, the success or failure of the cryptocurrency market in 2026 depends on whether at least one of these catalysts actually works. The key is whether liquidity can shift from a few mega-cap assets to a broader market, or if the current concentration persists. As the traditional four-year cycle becomes obsolete, what moves the market are precisely these flows of liquidity and the direction of capital movement.