Looking at Bitcoin cycles from $87K: Insights from the four major bull runs

Currently, Bitcoin’s price hovers around $87K, at a critical juncture. Looking back at the past decade’s ups and downs, you’ll find that each crypto bull run follows certain patterns—understanding these patterns is key to seizing opportunities in the next cycle.

What is a Bull Run? Why Is It Worth Paying Attention To

A Bitcoin bull run isn’t just random price jumps; it’s a sustained upward trend triggered by specific events. Key features include: surging trading volume, skyrocketing social media buzz, and active wallet movements. What is the essence behind these signs? Supply tightness.

Bitcoin experiences a halving event every four years, slashing miner rewards and reducing new coin issuance. Historical data speaks volumes:

• After 2012 halving: BTC surged by 5,200%
• After 2016 halving: BTC increased by 315%
• After 2020 halving: BTC rose by 230%

Reduced supply + increased demand = soaring prices. This logic has been repeatedly validated in every bull run.

2013: Bitcoin’s First Breakout Shock

In 2013, Bitcoin skyrocketed from $145 to $1,200, a 730% increase. It sounds unbelievable, but market conditions at the time aligned perfectly—Cyprus banking crisis drove investors to seek safe havens, and early adopters’ enthusiasm fueled the hype.

However, the good times didn’t last. Mt. Gox, which handled 70% of trading volume at the time, collapsed in 2014, causing Bitcoin to fall back below $300. How severe was this blow? 75% decline.

This bull run taught the market a lesson: fragile infrastructure can be a fatal flaw.

2017: Retail Investors’ Carnival

The 2017 bull run was even larger and more participatory. Bitcoin shot from $1,000 to nearly $20,000, a 1,900% increase. Two main drivers fueled this surge:

ICO Boom: New projects raised funds via token crowdfunding, attracting a flood of retail investors who also became Bitcoin buyers.

Exchange Democratization: User-friendly platforms emerged, making it easy for ordinary people to buy crypto—no longer just for tech geeks.

Media Effect: Every new high made headlines, creating a feedback loop—price up → media coverage → more buyers → price climbs further.

Daily trading volume soared from less than $200M at the start of the year to $15B by year-end. But in early 2018, regulators struck hard—China banned ICOs and exchanges, Bitcoin entered a bear market, dropping over 80%.

2020-2021: Institutional Capital Rewrites the Script

This bull run saw Bitcoin rise from $8,000 to $64,000 (a 700% increase), with a completely different character. The main players shifted from retail to institutional investors.

Companies like MicroStrategy, Tesla, Square began adding Bitcoin to their assets. By 2021, MicroStrategy held over 125,000 BTC. What does this mean? Traditional finance started embracing digital assets.

Driving forces included:

• “Digital Gold” Narrative: Pandemic-induced economic uncertainty made investors seek inflation hedges, repositioning Bitcoin.
• Futures and ETFs: Derivatives and fund products provided formal channels for institutional entry.
• Fiscal Stimulus: Ultra-loose monetary policies worldwide heightened inflation fears and demand for hedges.

But this cycle also faced challenges. Environmental concerns about Bitcoin mining energy consumption grew, and regulators increased scrutiny. Mid-2021, Bitcoin dropped from $64K to $30K, a 53% decline.

2024-25: New Playgrounds in the ETF Era

Now, this is the most intriguing cycle. Bitcoin is currently fluctuating around $87K, still room to reach the all-time high of $126.08K. What’s driving this bull run?

Spot Bitcoin ETF Approval (January 2024): The US SEC finally approved it, allowing institutional investors to participate via familiar ETF products. This is a big deal—it means pension funds, asset managers, insurance companies can enter compliantly.

Data shows: by the end of 2024, Bitcoin ETF net inflows exceeded $4.5B, surpassing the same period’s gold ETF inflows. A signal that traditional finance is tilting toward digital assets.

Fourth Halving (April 2024): Another supply squeeze, reinforcing the historical pattern.

Political Shift: Some policies are crypto-friendly—El Salvador adopted Bitcoin as legal tender; Bhutan’s official investment fund accumulated over 13,000 BTC. If major countries follow suit, demand could skyrocket.

Additional factors: Potential new regulations, technological upgrades, macroeconomic trends—all could act as catalysts.

These combined factors pushed Bitcoin from $40K to $87K, a gain of over 100%.

How to Recognize a Bull Run? On-Chain Data and Technical Indicators

Not every rally is a bull run. Genuine bull markets follow identifiable signs:

Technical Indicators: RSI (Relative Strength Index) breaking above 70 signals strong buying momentum; golden cross (short-term moving average crossing above long-term MA) often indicates trend reversal. In 2024, Bitcoin’s RSI remained high, with prices repeatedly breaking key moving averages.

On-Chain Data:

• Increased stablecoin inflows into exchanges → indicating readiness to buy
• Bitcoin outflows from exchanges → large holders accumulating, reducing supply
• Wallet activity surging → rising trading heat
• Institutional holdings rising, e.g., MicroStrategy adding thousands of BTC, tightening supply

Macro Environment: Regulatory friendliness, liquidity, global economic outlook influence risk appetite.

What Will the Next Bull Run Look Like? Five Key Areas to Watch

1. Government Strategic Reserves
El Salvador has adopted Bitcoin as legal tender. Bhutan’s official fund holds over 13,000 BTC. If the US or Europe follow suit, demand could explode.

2. New Financial Products
Beyond spot ETFs, futures, options, and funds will continue to emerge. Each new product opens a fresh channel for Bitcoin adoption.

3. Regulatory Clarity
Current regulations are “gray areas.” Clear frameworks will attract conservative investors.

4. Technological Upgrades
Bitcoin is considering features like OP_CAT, which could unlock Layer-2 scalability and DeFi functionalities. If Bitcoin can handle more transactions and applications, its ecosystem could explode, potentially surpassing Ethereum in DeFi dominance.

5. Halving Cycles Continue
Remaining halving events will keep tightening supply. As Bitcoin approaches the 21 million cap, scarcity will become an even stronger price driver.

Preparing for the Next Bull Run: Practical Investor Checklist

When a bull run hits, most people either chase high and get caught or miss out entirely. How to avoid these extremes?

Step 1: Educate Yourself
Read the Bitcoin whitepaper, study historical cycles. Chaos of 2013, ICO bubble of 2017, institutional entry of 2021—each has unique lessons. Recognizing patterns requires understanding history.

Step 2: Develop a Strategy

• Define goals: short-term trading or long-term holding?
• Set risk tolerance: how much volatility can you handle?
• Diversify: don’t go all-in on Bitcoin; include other cryptos or traditional assets.

Step 3: Choose Reliable Platforms
Security first. Use exchanges with strict KYC, cold storage, regular audits. Enable 2FA, whitelist withdrawals.

Step 4: Self-Manage or Delegate
For short-term, exchange accounts suffice; for long-term, consider hardware wallets (cold storage) to eliminate online risks.

Step 5: Continuous Monitoring

• Watch regulatory news: policy shifts often trigger market moves
• Track on-chain data: whale activity, ETF flows, stablecoin inflows
• Avoid FOMO: don’t chase gains impulsively

Step 6: Tax Planning
Crypto transactions may have tax implications. Know your local rules and keep records.

Step 7: Engage with the Community
Forums, webinars, conferences—connect with other investors for insights and different perspectives.

When Will the Next Bull Run Occur?

Precise prediction is impossible, but signals include:

• Halving cycles: every four years, a natural trigger
• New products: ETF launches and derivatives often spark interest
• Macroeconomics: recession, high inflation, central bank rate cuts can boost risk assets
• Regulatory breakthroughs: policy shifts in major countries often mark turning points
• Technological upgrades: major feature releases can redefine use cases

Bitcoin’s resilience lies in its constant catalysts. 2013 was driven by banking crises and early enthusiasm; 2017 by ICO fever; 2021 by institutional acceptance; 2024 by ETF, halving, and policy support. What’s next? No one knows for sure, but betting on one is a sure thing.

Final Words

Over the past decade, Bitcoin has evolved from a geek toy to a financial asset. Each bull run is more mature, with broader participation and more manageable risks.

Understanding cycles isn’t about timing the exact top (that’s futile), but about being prepared when opportunities arise. Bitcoin at $87K still has room to the previous high, but risks are also building.

Do your homework, plan ahead, manage risks, and be patient. That’s the secret to surviving longer in the crypto market.