As institutional participation continues to rise, the market has shown divergence over whether Bitcoin's traditional four-year cycle has become ineffective. However, before key technologies and macro signals are gradually validated, we must return to the cycle itself to assess whether the market has transitioned from an upward phase to a correction range. Historical experience indicates that even if the market structure changes, the rhythm of the cycle often does not disappear but continues in a more complex form. The key to this round of market activity lies not in short-term fluctuations but in whether Bitcoin has deviated from its existing cyclical trajectory.

Slowing Demand and Technical Breakdowns: Concentration of Cyclical Downward Signals

The core driving force behind Bitcoin's cyclical operation is not the halving event itself but the changes in demand expansion and contraction. Historically, once the growth rate of demand slows, Bitcoin often enters a bear market phase. In the current market, the continuous selling by miners and early holders has largely offset the structural incremental funds brought by ETFs and corporate treasuries, leading to a decrease in market volatility and a clear retreat in risk appetite.

On a technical level, key cyclical signals have clearly emerged. The monthly closing price of Bitcoin has fallen below the 12-month moving average, a phenomenon that first occurred in November 2025. Looking back at history, this signal often marks the end of the bull market phase and the beginning of a correction period. Previously, Bitcoin had regained this moving average in December 2022, initiating this round of the bull market; now, with the moving average once again lost, the judgment of cyclical decline is reinforced.

Political and Liquidity Cycles Dominate the Rhythm: Midterm Election Pressure Cannot Be Ignored

From a higher-level cyclical framework, Bitcoin's four-year operational rhythm is highly synchronized with the U.S. political and liquidity cycles. Historical data shows that midterm election years are typically the stage where market pressure is most concentrated within the presidential cycle. As political uncertainty rises, liquidity tightens, and risk appetite declines, risk assets often come under pressure in advance.

This pattern is particularly evident in Bitcoin's history. In 2014, 2018, and 2022, Bitcoin experienced significant corrections in years related to midterm elections. In this cycle, the macro environment corresponding to the 2026 midterm elections has begun to gradually show pressure through rising unemployment rates and limited policy space. Historical experience indicates that during this phase, interest rate cuts often struggle to provide immediate support for risk assets, with their positive effects typically lagging until growth stabilizes.

Overall, multiple cyclical and structural signals are simultaneously pointing to Bitcoin entering a correction phase. Slowing demand momentum, the loss of key technical levels, and the resonance of political and liquidity cycles have made the market environment noticeably more complex. Unlike past phases driven purely by trends, the current market is shifting from trend-driven to a mode of operation centered on rhythm and structure. In this context, volatility itself will become a new characteristic, providing a more cost-effective range for gradually establishing medium- to long-term positions before the next cycle arrives.

The above viewpoints are partly derived from Matrix on Target, contact us_ to obtain the complete report of Matrix on Target._

Disclaimer: The market carries risks, and investment should be approached with caution. This article does not constitute investment advice. Trading in digital assets may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided in this content.

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