Authored by: Liu Jiaolian

I. The Split of Market Narratives

Bitcoin has been consolidating above $77,000 for a period of time. The market has shown serious divergence in its judgments for the second half of the year.

Optimists believe that the $60,000 in February is the bottom of this bear market, and a steady recovery will follow in the second half of the year. Cautious parties warn that new lows must be created, and the true bottom might be at $55,000 or even lower. Pessimists predict that the bear market will extend until 2027.

Each side has its own narrative, making it difficult to reach consensus.

A deeper issue lies in the split of methodologies. Some believe that the four-year cycle remains valid, that everything is within the rules. Others think that the cycle has been broken, requiring a new analytical framework. There are also those who only look at macro data, believing that oil prices and the Federal Reserve dictate everything.

Jiaolian believes that the reason these debates cannot reach consensus is the lack of a unified methodology.

Let us return to a basic philosophical framework: internal factors are the basis for the development of things, while external factors are the conditions for their development; external factors operate through internal factors.

Using this framework to view Bitcoin makes many things clearer.

II. What are the Internal Factors of Bitcoin

Internal factors are the inherent contradictions of things that determine their essence and development trend. The internal factors of Bitcoin include at least four levels.

The first level is the fundamental contradiction: the supply rigidity caused by halving vs. the price elasticity of demand. This is the underlying driving force of the four-year cycle. Every four years, the mining reward is halved, changing the supply-demand structure from the supply side. This mechanism is embedded in the code and will not change due to fluctuations in oil prices.

The second level is the technical-economic contradiction: the contradiction between mining cost and coin price. Miners invest energy and hardware in mining, and costs dictate their behavior. When the coin price drops below the cost, inefficient miners will be forced to shut down, reducing computing power, and then the market will rebalance.

The third level is the internal market contradiction: the contradiction between long-term holders and short-term speculators. LTH (Long Term Holders) are responsible for accumulation and distribution, while STH (Short Term Holders) provide liquidity. When chips change hands from strong hands to weak hands, the market peaks; when they change hands from weak hands to strong hands, the market bottoms. On-chain indicators like MVRV and SOPR measure the state of this contradiction.

The fourth level is the contradiction between narrative and reality: Bitcoin claims to be digital gold, an anti-inflation asset, but its actual performance is often highly correlated with NASDAQ. This contradiction determines Bitcoin's performance elasticity in different macro environments.

These four levels of internal factors constitute the cyclical framework of Bitcoin that is relatively independent of the macro environment. They will not disappear due to fluctuations in oil prices.

There is a counterexample that can prove the existence of internal factors. In 2023, the Federal Reserve was still in a tightening cycle, and the macro environment was not friendly. However, Bitcoin rose from $16,000 to over $70,000. The driving force behind this trend was the halving expectations and ETF narratives—these are all intrinsic factors.

If external determinism holds, the extremely loose macro environment from 2020 to 2021 should have caused Bitcoin to rise unilaterally. In reality, it experienced several rounds of over 30% corrections.

Therefore, internal factors are the basis. External factors are the condition.

III. Current Oil Price Shock: How External Factors Operate

Cryptoslate published an article on April 25 analyzing the impact of the oil price shock on the Federal Reserve and Bitcoin [1].

The logic chain of the article is: Tension in the Strait of Hormuz leads to oil supply disruptions, rising oil prices increase inflation, and the Federal Reserve is forced to maintain a hawkish stance, putting pressure on Bitcoin.

Jiaolian believes that the value of this analysis lies in accurately identifying the current most important external variable. However, the handling of the causal relationship is overly linear, easily leading people to mistakenly believe that oil prices directly determine Bitcoin's ups and downs.

First, let’s look at the factual portion.

On April 20, shipping in the Strait of Hormuz was almost at a standstill. After warning shots and the seizure of an Iranian cargo ship, only a few vessels passed in 12 hours. The normal traffic volume is about 130 ships per day.

Alberto Musalem, President of the St. Louis Fed, said that high oil prices could keep core inflation around 3%, far above the 2% target. John Williams, President of the New York Fed, stated that the situation in the Middle East has been pushing up inflation pressures and increasing uncertainty.

The Federal Reserve will hold an FOMC meeting from April 28 to 29, with Q1 GDP and PCE data to be announced on April 30. These events clustered within three days require the market to digest new inflation concerns, the Fed’s statements, and key economic data at the same time.

These facts are clear.

But the problem lies in the transmission path from oil prices to Bitcoin, which is not a straight line. Oil prices do not push Bitcoin down directly, but instead affect Bitcoin through the operation of internal factors.

Specifically:

Rising oil prices increase energy costs, which will impact miners. Inefficient miners shut down, temporarily reducing computing power, affecting Bitcoin's security and narrative. However, efficient miners survive, and the industry's concentration may increase.

The inflation expectations driven by oil prices will affect the narrative of digital gold. If Bitcoin demonstrates anti-inflation properties in this round, the narrative will be strengthened. If it falls with risk assets, the narrative will be weakened.

Oil prices delay interest rate cut expectations, affecting the opportunity cost for short-term speculators. Risk appetite decreases, speculative funds flow out, increasing short-term selling pressure.

The macro uncertainty brought by oil prices will affect the behavior of long-term holders. They may accelerate accumulation, viewing Bitcoin as a safe-haven asset; or they may sell, switching to gold or the US dollar. Which one occurs needs to be observed through on-chain data.

Thus, the ultimate performance of Bitcoin, even under the same oil price shock, depends on the net effect after the competition of these forces. With different internal states, the same external factors can lead to different outcomes.

This also explains why Bitcoin's performance might differ in 2022 and 2026, even though both years have high oil prices. In 2022, the internal factors were bearish in the second year post-halving, and the direction of internal and external factors resonated downwards, resulting in significant declines. In 2026, the internal factor of institutional buying from ETFs mitigates some of the external pressure.

IV. The Cycle Has Not Been Broken, It Has Been Modulated

Many people in the market say that the four-year cycle has been broken. Jiaolian believes that this statement needs careful analysis.

First, let's discuss what hasn't been broken.

Halving still occurs every four years. The rigidity of supply changes still exists. The contradiction between miners' computing costs and coin prices is still in operation. The transfer of chips between LTH and STH remains the core mechanism of bull-bear transitions. On-chain indicators like MVRV and SOPR still present similar cyclical patterns to the past.

The framework of the cycle remains intact.

What has truly changed is the weight of external factors.

In Bitcoin's early days, the external macro environment had a weak correlation with it. Price movements were mainly driven by internal narratives. That's no longer the case. Bitcoin's market capitalization is now substantial enough, and its connection to the global financial system is deep. The Federal Reserve's interest rate decisions, changes in global M2, and geopolitical risks increasingly impact the price.

This can be understood through a physics analogy.

The internal factors of Bitcoin are the inherent frequency of the oscillator, approximately a four-year cycle. The macro external factors are external driving forces, whose frequency and amplitude are constantly changing. The actual performance is the superposition of inherent oscillation and external driving.

When the frequency of external driving approaches the inherent frequency, the amplitude will be amplified. When the directions oppose, the trend becomes entangled. When the external driving is strong enough, the periodic characteristics of the inherent frequency will be masked—but not disappear.

The correct understanding of the breaking of cycles is not that the cycle has disappeared, but that the weight of external factors has significantly increased to the point that the inherent period of internal factors has been modulated. The amplitude and phase have changed, but the framework remains.

This also explains a previously discussed question: why the bull market increase in 2021 was less than in 2017, but the bear market decline in 2022 was still profound?

Because the limited increase during the bull market was the result of diminishing marginal effects of the halving narrative—this is a change at the internal factor level. However, the depth of the bear market depends on whether internal and external factors resonate. In 2022, the internal factors were bearish (the second year after halving), and the external factors were also bearish (aggressive rate hikes), resulting in downward resonance and naturally significant declines.

The performance in 2026 will similarly depend on whether the internal and external factors resonate or hedge each other.

V. Three Scenarios for the Second Half of 2026

Based on the framework of internal and external factors, three scenarios can be projected.

Scenario A: Steady Recovery

From the internal perspective, historical patterns in the second year post-halving are bearish, but the institutional buying brought by ETFs provides structural support. From the external perspective, oil prices retreat, and rate cut expectations stabilize as the macro environment shifts from tight to loose.

The relationship between internal and external factors is one of hedging: the external factors change from bearish to bullish, offsetting the bearish pressure from internal factors. The result is that $60,000 is the bottom, with an upward oscillation in the second half of the year, gradually challenging previous highs.

Representing this scenario are institutions such as Bernstein, VanEck, and Grayscale. VanEck's analysts point out that Bitcoin's hash rate is recovering and that funding rates are in negative territory, both of which are bullish technical signals [2].

Scenario B: Forming a Bottom After Hitting a New Low, Recovery in 2027

Internal factors are bearish, as the pressure from the second year post-halving has not fully released. On-chain metrics like MVRV have not entered the historical bottom range. External factors show stubborn oil prices, the Federal Reserve maintaining a hawkish stance, and rate cut expectations being further delayed.

The directions of internal and external factors are consistently bearish but not in extreme resonance. The result is that Bitcoin drops to the $55,000 to $60,000 range, completing one last decline before beginning to form a bottom, leading to recovery in 2027.

Representatives of this scenario are some on-chain analysts from CryptoQuant.

Scenario C: Bear Market Extended to 2027

On the internal factor level, in addition to the bearish pressure in the second year post-halving, miners may face profitability pressures due to rising energy costs. If the coin price remains low, a massive wave of shutdowns could occur. The accumulation willingness of LTH may also be shaken by continuous declines.

On the external factor level, oil prices remain high, interest rate cuts are pushed to 2027, and there may even be an economic recession. The Federal Reserve is struggling between inflation and growth.

Internal and external factors resonate downward, and this is not a short-term resonance, but a prolonged one. The result is that Bitcoin may drop to $45,000 or even lower, with recovery postponed until after the second quarter of 2027.

Representatives of this scenario include several seasoned traders and on-chain analysts. Peter Brandt believes the market still lacks one final liquidating drop. Willy Woo predicts the typical bear market bottom range is around $45,000, with deeper defenses at $30,000 and $16,000 if the macro situation worsens. Benjamin Cowen believes the four-year cycle is still intact, and it is far from the time to declare the end of the bear market.

VI. How to Observe the Power Comparison of Internal and External Factors

For investors who do not want to speculate on price movements, it is more important to establish an observational framework.

Observational indicators for internal factors include: whether the MVRV Z-score enters the historical bottom range; whether LTH's net positions are in accumulation or distribution; whether miners' computing power and difficulty have experienced a large-scale decline; whether short-term holders measured by SOPR have panicked and cleared out.

Observational indicators for external factors include: changes in the probability of interest rate cuts shown by CME FedWatch; oil price trends and geopolitical movements in the Strait of Hormuz; weekly fund flows into Bitcoin ETFs—this is an intermediary variable through which external factors operate on internal factors.

The key judgment is whether internal and external factors are in a state of resonance or hedging.

If they resonate upwards, both are bullish, and the market will make a strong breakthrough. If they resonate downwards, both are bearish, and we will see a deep correction, similar to 2022. In a hedging state, one is bullish and the other is bearish, and the market will show fluctuation, range-bound, slow bulls, or slow bears.

The current market is probably in some position of a hedging state.

VII. Conclusion

Returning to the question at the beginning of this article: has Bitcoin's four-year cycle really been broken?

Jiaolian believes that the cycle has not been broken. The game of halving, supply and demand, miners, accumulators, and speculators—these contradictions at the level of internal factors are still in operation. The framework of the cycle remains.

What has truly changed is the weight of external factors. Bitcoin is no longer a marginal asset isolated from the global financial system. Its market capitalization is large enough and its connections to the macro environment deep enough. Oil prices, the Federal Reserve, liquidity—these external variables are having an unprecedented impact on Bitcoin.

External factors operate through internal factors. The same external factors can lead to different results under different internal conditions. This is the most basic principle of dialectics, but it is often forgotten in market discussions.

For the second half of 2026, no one can give a definitive prediction of price movements. The market is complex, and there are multiple possibilities in the game of internal and external factors. However, it can be clearly stated that regardless of which of the three scenarios becomes a reality, a recovery in 2027 is highly probable.

Because the internal factors of Bitcoin will not disappear. Halving continues to occur, and scarcity continues to increase. As for the external factors—macro liquidity—will eventually turn. The Federal Reserve cannot tighten forever; the long-term trend of global M2 is expansion.

Under the unified analytical framework of internal and external factors, investors can have less anxiety about short-term price movements and more grasp of long-term structures. Instead of debating whether $60,000 is the bottom, it would be better to observe variables such as oil prices, FedWatch, and ETF flows, as well as how they influence Bitcoin's on-chain signals.

Persist in dollar-cost averaging and increase positions when there are declines. Adhere to long-termism.

References:

[1] "The global oil shock has the Fed cornered just days before its next meeting — what that means for Bitcoin", *Cryptoslate*, Apr 25, 2026. [Link](https://cryptoslate.com/the-global-oil-shock-has-the-fed-cornered-just-days-before-its-next-meeting-what-that-means-for-bitcoin/)

[2] "Bitcoin Hit Its Highest Price Since January—Why VanEck Analysts See More Potential Gains", *Decrypt*, Apr 25, 2026. [Link](https://decrypt.co/365556/bitcoin-highest-price-january-why-vaneck-analysts-more-gains)

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。