Since reaching an all-time high of approximately $126,000 on October 6, 2025, the price of Bitcoin has dropped by about 25% in just over a month, raising widespread concerns in the market. Many investors are beginning to worry whether this signals the impending repetition of the historical four-year cycle "curse," suggesting that Bitcoin will once again experience a significant correction. Meanwhile, divisions within the Federal Reserve regarding interest rate cuts are intensifying, further exacerbating macroeconomic uncertainty in the market. Bernstein analysts point out that this decline reflects investors' anxiety over the historical four-year cycle pattern, but they believe the current fundamentals are stronger, making it more likely to be a "relatively shallow correction." However, amidst the resonance of institutional sell-offs and retail panic, can Bitcoin's bull market continue?

I. Bitcoin Plummets 25%: The Shadow of the Four-Year Cycle "Curse"

Bitcoin (BTC) has fallen about 25% since reaching an all-time high of approximately $126,000 on October 6.

Historical Four-Year Cycle: Bernstein analyst Gautam Chhugani notes that this decline reflects investors' anxiety over the historical four-year cycle pattern, which has seen peaks in 2013, 2017, and 2021. Many investors sold early during the fourth quarter market weakness, believing that 2025 would repeat, thus partially creating a self-fulfilling prophecy.

Short-Term Correction, Not Major Downtrend: However, Bernstein analysts believe this marks a short-term correction rather than the beginning of a major downtrend. They argue that the current fundamentals are stronger, and data suggests this is more likely a "relatively shallow correction," forming a new local bottom rather than the 60% to 70% declines seen in historical cycles—thanks to the substantial absorption of supply by long-term holders.

II. Intensifying Divisions Within the Federal Reserve: Macroeconomic Uncertainty Looms Over the Market

The Federal Reserve has developed serious divisions over which poses a greater threat: persistent inflation or a sluggish labor market, a level of disagreement that has been nearly unprecedented during Chairman Powell's nearly eight-year tenure.

Dovish Voices: On November 18, Federal Reserve Governor Waller expressed his support for another interest rate cut at the December meeting, as he grows increasingly concerned about the sharp slowdown in the labor market and employment. Waller stated, "I am not worried about accelerating inflation or a significant rise in inflation expectations; my focus is on the labor market. After several months of weakness, the September employment report, which will be released later this week, or any other data in the coming weeks, is unlikely to change my view that another rate cut is necessary."

Hawkish Voices: "Fed mouthpiece" Nick Timiraos pointed out in an article that there are two factions within the Federal Reserve, one of which is more concerned about inflation issues, and this group has recently expanded to include four regional Fed presidents with voting rights this year, as well as Fed Governor Barr.

Challenges of Division: Nick Timiraos indicated that regardless, at least three members may hold differing opinions at the December meeting, with three officials appointed by Trump opposing maintaining the current interest rates; if the Fed cuts rates by 25 basis points, the opposing votes could also reach at least three.

III. Institutional Sell-Offs and Retail Panic: The Market is in a Clear De-Leveraging Phase

Amid increasing uncertainty regarding Federal Reserve policy, the resonance of institutional sell-offs and retail panic has placed the market in a clear de-leveraging phase.

ETF Fund Outflows: QCP Capital stated on social media that ongoing OG sell-offs and ETF fund outflows have cast a shadow over the sustainability of Bitcoin's rebound following the resolution of the government "shutdown" crisis. The outflow of funds from the U.S. spot Bitcoin ETF has recorded approximately $1.3 billion in redemptions over four consecutive trading days, further increasing market pressure.

Clearing of Futures Long Positions: Matrixport expressed market views stating that the current market is in a clear de-leveraging phase, with the risk of maintaining high positions rising. The open interest in Ethereum has fallen by 50%, indicating that leveraged funds are rapidly contracting.

Liquidity Contraction: Matrixport noted that Bitcoin is approaching the critical support level of $93,000, and liquidity in this range may weaken further in a short time.

Concentration of ETF Holdings: Matrixport reminded that the previously crowded long positions in futures during the fourth quarter have been largely cleared, with pressure on the leveraged side being released in phases. What needs attention next is the current relative concentration of ETF holdings; if the market continues to weaken, this portion of funds may face further reduction demands, leading to new liquidity pressures.

IV. High Correlation Between Bitcoin and the Nasdaq Index: Like Leveraged Tech Stocks

On November 17, The Kobeissi Letter reported that the 30-day correlation between Bitcoin and the Nasdaq 100 index reached approximately 0.80, the highest level since 2022. This is also the second-highest reading in nearly a decade.

Positive Correlation: Over the past five years, the correlation between the two has remained positive, with a brief fluctuation in 2023. Thus, the five-year correlation between Bitcoin and the Nasdaq index has reached 0.54.

Like Leveraged Tech Stocks: In contrast, the correlation between Bitcoin and cash or gold is essentially zero. This indicates that Bitcoin's performance is increasingly resembling that of a leveraged tech stock.

V. The Federal Reserve's Attitude Towards Cryptocurrencies: Neither Encouraging Nor Discouraging

On November 17, Federal Reserve Vice Chairman Jefferson stated that financial innovation has always been a hallmark of the U.S. financial system, and the rise of digital assets is part of that.

Neutral Stance: The Federal Reserve's regulations neither encourage nor discourage the use of cryptocurrencies, leaving it to the private sector.

Safety and Stability: The role of the Federal Reserve is to ensure that the banking sector remains safe and sound while the public embraces new technologies.

Monetary Policy Capability: As long as the Federal Reserve's policies remain aligned with the needs of businesses and households, there is no reason to believe that cryptocurrencies and other innovations will affect the Federal Reserve's monetary policy capabilities.

Conclusion:

The sharp decline in Bitcoin since its October peak, along with the divisions within the Federal Reserve regarding interest rate cuts, together form a complex picture of the current crypto market. Although investors remain concerned about the four-year cycle "curse," Bernstein analysts believe the current fundamentals are stronger, making it more likely to be a "relatively shallow correction." However, amidst the resonance of institutional sell-offs and retail panic, the market is in a clear de-leveraging phase, and the sustainability of Bitcoin's rebound remains to be verified.

Related Reading: Qian Zhimin Sentenced to 11 Years and 8 Months in London, Hearing on Frozen Asset Disposal to be Held

Original Article: “Will the Bull Market Continue After the Short-Term Pullback of Bitcoin (BTC) and the Reappearance of the Four-Year Cycle 'Curse'?”

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。