Bitcoin Bull Market Cycle Analysis: Historical Patterns and Key Signals for the Next Market Rally

What is happening right now? How far is Bitcoin from the next major rally

At the end of 2024, Bitcoin is hovering around $88.36K, still with room for a pullback from the all-time high of $126.08K. But this precisely indicates that the market may be gathering strength—each major rally is preceded by such a “consolidation period.”

Since its inception in 2009, Bitcoin has experienced multiple clear bull and bear cycles. Understanding the patterns of these cycles and recognizing the signals for a bull market are crucial for investors.

What is the essence of Bitcoin’s bull market?

Bitcoin’s bull market is not random fluctuation but results from the superposition of multiple factors such as supply shocks, institutional demand, and favorable policies. Simply put:

Supply side: The halving events approximately every 4 years directly limit new coin issuance. Historical data shows that after each halving, Bitcoin experiences significant gains within 12 months—5,200% after 2012 halving, 315% after 2016, and 230% after 2020.

Demand side: Demand drivers have evolved from early tech believers → retail enthusiasm → institutional influx.

Sentiment indicators: RSI breaking above 70, surge in on-chain active wallets, reduced exchange inflows (indicating holders rather than sellers), all serve as bull market signals.

What have we learned from the past four bull markets?

2013: From $145 to $1,200, a frenzy among small circles

That year, Bitcoin transformed from an obscure geek toy into a hot topic in finance.

Core catalysts:

• Cyprus banking crisis made investors realize: centralized finance can also fail
• Media attention increased, “Bitcoin” frequently appeared in headlines
• Mt. Gox collapsed in 2014, but at that time it handled 70% of global Bitcoin transactions, showing strong demand

Cost: Bitcoin dropped below $300 in 2014, a 75% decline. This was the first lesson for investors—big rises are always followed by big drops.

2017: From $1,000 to $20,000, ICO bubble and retail frenzy

That year, Bitcoin was like a virus, highly contagious. It spread from professional investors to taxi drivers, barbers, even your grandma.

Core catalysts:

• ICO craze: new projects raised funds via token issuance, retail investors bought these tokens, also bottoming out Bitcoin
• Exchange entry barriers lowered: certain exchanges (hereinafter “some exchange”) made it easy for retail to participate
• FOMO peaked: daily trading volume soared from $200M at the start of the year to $15B+ at year-end

Cost: Dropped to $3,200 in 2018, an 84% decline. Many retail investors got trapped.

2020-2021: From $8,000 to $64,000, the institutional era begins

This time, it’s different. Participants shifted from retail to listed companies like MicroStrategy, Tesla, Square. From financial democratization to Wall Street’s game.

Core catalysts:

• Fed’s massive liquidity injection, zero interest rate era
• “Digital gold” narrative established: facing currency devaluation risks, Bitcoin looks more valuable
• Institutional entry: early 2021, institutions held over 1 million BTC, with inflows surpassing $10B —PayPal, Square, and other payment giants officially supporting Bitcoin payments

Cost: Pulled back to $30K in July, a 53% decline. But compared to 84% in 2018, the decline is milder—indicating increased market resilience due to institutional holdings.

2024-2025: From $40K to over $88K, collision of ETFs and policies

The biggest variable in this cycle is the approval of spot Bitcoin ETFs.

Core catalysts:

• SEC approved a spot Bitcoin ETF in January 2024, opening the door for traditional finance
• ETF inflows hit record: $4.5B in November alone, far surpassing gold ETFs
• The fourth halving (April 2024) arrived as scheduled, again creating supply scarcity
• US policy shift: new administration signals crypto-friendly stance, even proposing to buy 1 million BTC with US bonds

In this cycle, the power of institutions and policies is unprecedented.

How to predict the next bull market?

Instead of guessing blindly, learn to watch for these signals:

Technical signals:

• RSI hovering between 50-70, indicating not yet initiated
• 50-day and 200-day moving averages about to form a “golden cross,” often a bullish sign
• Bitcoin breaking previous highs (if surpassing $95K), usually signals the start of a new upward cycle

On-chain signals:

• Number of addresses holding Bitcoin reaching 55 million, but activity can be higher
• If exchange inflows decrease and cold wallet holdings increase, it indicates accumulation
• Whale wallet movements: if large holders start buying rather than selling, it’s a bullish sign

Macro signals:

• Global liquidity conditions (Fed policies, treasury yields)
• Geopolitical risks (more instability drives safe-haven crypto inflows)
• Regulatory trends (friendly policies = market catalysts)
• Next halving cycle (2028)—markets often react about 24 months in advance

Why 2025 could be a key year?

First: Institutional learning curve. BlackRock’s holding of 467,000 BTC via its ETF will support further accumulation.

Second: Policy uncertainty resolution. If the new government advances “Bitcoin as strategic reserve” legislation, it would be a nuclear-level positive.

Third: Technical upgrades. Activation of OP_CAT code is expected, significantly enhancing Bitcoin’s Layer-2 and DeFi capabilities, attracting new investment logic—from mere “store of value” to “productive assets.”

Fourth: Continued tightening of supply. Institutions like MicroStrategy are aggressively accumulating in 2024, even at high prices, showing strong confidence in long-term prospects.

Practical guide for Bitcoin investors

1. Find patterns from history

Comparing the three major bull markets in 2013, 2017, and 2021:

• First cycle (2013): driven by sentiment, prone to sharp drops
• Second cycle (2017): driven by retail, FOMO intense
• Third cycle (2021): driven by institutions, more stable
• Fourth cycle (2024-): driven by policies, clearer outlook

The trend is clear: the more professional the participants, the more stable the market, but the room for large corrections also shrinks.

2. Develop your own entry strategy

Don’t chase highs: When Bitcoin approaches new all-time highs, a correction is often imminent.

DCA (Dollar Cost Averaging): If bullish long-term (3+ years), invest a fixed amount monthly to average costs automatically.

Monitor liquidity: You can participate via ETFs, futures, or spot. ETFs are safest but may have lower liquidity; futures are flexible but riskier.

3. Risk management

Set stop-loss orders: Even if bullish, use take-profit/stop-loss orders to limit potential losses. Bitcoin has experienced declines over 80%, so without safeguards, you risk losing everything.

Avoid leverage: Unless you are a professional trader, holding spot is enough. Using leverage for 3x gains can lead to liquidation and losses.

Diversify risk: Keep Bitcoin at no more than 10-20% of your total assets. Allocate the rest to other cryptocurrencies, stocks, bonds.

4. Psychological preparation

Bitcoin’s volatility can drive people crazy. When prices rise, want to go all-in; when falling, want to cut losses. History shows:

• Those who hold steadily make big money
• Frequent traders lose money

Set a clear investment horizon (e.g., 3 years). Unless a black swan event occurs, don’t touch it.

Key upcoming dates to watch

Early 2025: Implementation of new US crypto policies

Spring 2025: Whether new countries adopt Bitcoin as strategic reserve

Before end of 2025: Can the market break $100K?

Before 2028: Prepare for the next halving cycle

Conclusion: Will Bitcoin continue to rise?

Historically, the answer is: Yes, but the timing and path will be unpredictable.

Investors in 2013 who held until 2017 gained 1,330%. Those in 2017 who held until 2021 gained 2,900%.

The key points:

1. Understand cycles, don’t be scared by short-term volatility
2. Focus on key signals, not daily price movements
3. Be prepared, wait for the right moment

Bitcoin’s current price is $88.36K, still below the all-time high of $126.08K. But this pullback may be just a “power-up” before the next surge.

For those wanting to participate, now is neither the best nor the worst time—it’s a time to prepare. Study history, make plans, set discipline, and wait.

When will the next Bitcoin bull run start? The answer might be: When you are fully prepared.