Bitcoin Bull Market Cycle Decoded: An Investor's Guide from Halving to All-Time High

Since its birth in 2009, Bitcoin has experienced multiple dramatic price fluctuations. The latest data shows that BTC is currently around $87,780, with a market capitalization surpassing $1.75 trillion. In past market cycles, from a surge from $145 in 2013 to breaking $93,000 in 2024, such gains are remarkable. So, has the bull market already started? We need to deeply understand the core mechanisms driving Bitcoin cycles.

Core Drivers of the Bitcoin Bull Market

Bitcoin’s price cycles are closely linked to the halving mechanism. Every four years, the mining reward is halved, directly reducing the supply of new coins. Historical data shows that after the last three halvings, Bitcoin experienced significant rallies: a 5,200% increase after 2012, 315% after 2016, and 230% after 2020.

In addition to halving, the influx of institutional investors has become a key catalyst. After the U.S. Securities and Exchange Commission approved a spot Bitcoin ETF in January 2024, institutional funds flowed in massively. According to the latest data, the total net inflow of all Bitcoin ETFs has exceeded $28 billion, with BlackRock’s IBIT ETF alone holding over 467,000 BTC. This level of institutional participation is unprecedented.

Policy support cannot be ignored either. The friendly attitude of the Trump administration towards cryptocurrencies, and Senator Cynthia Lummis’s proposed “Bitcoin Act 2024” (which suggests the U.S. Treasury acquire 1 million BTC over five years), indicate a shift in government stance.

Key Signals Indicating the Start of a Bull Market

To determine whether a bull market has begun, investors should focus on a combination of technical and on-chain indicators:

Technical signals: Relative Strength Index (RSI) breaking above 70 indicates strong buying momentum; golden crosses of the 50-day and 200-day moving averages suggest trend reversals. During the 2024 rally, Bitcoin repeatedly confirmed these key levels.

On-chain data hints: Increased inflows of stablecoins into exchanges suggest investor readiness; declining Bitcoin reserves on exchanges indicate accumulation; rising wallet activity reflects increased participation.

Market sentiment indicators: Social media buzz, rising search interest, and the market fear and greed index are important references. When market expectations shift markedly, it often signals an imminent breakout.

From current market performance, multiple indicators point to a positive outlook, but short-term pullback risks should be watched.

Comparative Analysis of Past Bull Markets

Early 2013 Newcomer

That year, Bitcoin surged from $145 in May to $1,200 in December, a 730% increase. Drivers included safe-haven demand from the Cyprus banking crisis and media attention. However, the Mt. Gox exchange hack shattered investor confidence, leading to Bitcoin falling below $300 in 2014. This crisis underscored the importance of infrastructure security.

2017 Mass Frenzy

Starting at $1,000, Bitcoin approached nearly $20,000 in December, a 1,900% rally. The main drivers were the ICO boom and a large influx of retail investors. Daily trading volume increased from $200 million at the start of the year to $15 billion by year-end. However, after regulatory tightening in many countries, especially China’s ban on ICOs, Bitcoin dropped to $3,200 in 2018, an 84% decline. This cycle taught the market that retail-driven bull markets can easily form bubbles.

2020-2021 Institutional Era

Rising from $8,000 to $64,000 (peak in April), a 700% increase, driven decisively by institutional investment. MicroStrategy, Tesla, and other major companies incorporated BTC into their assets, and traditional financial giants began exploring this asset class. Bitcoin was repositioned as “digital gold” and an inflation hedge. This period demonstrated the power of institutional funds and provided stronger price support.

2024-25 Spot ETF Era

The approval of spot ETFs marks a critical inflection point. Unlike previous phases requiring direct purchase and custody of Bitcoin, ETFs allow traditional investors to participate through familiar channels. Starting at $40,000, Bitcoin reached $93,000 in November, a 132% increase. Although the latest price has pulled back to $87,780, the market is still digesting large-scale institutional allocations. This phase features increased financialization and more diverse participants.

Practical Investment Guide

Before participating in the next rally, the following steps are essential:

Step 1: Understand Fundamentals

Bitcoin’s value proposition lies in scarcity (fixed supply of 21 million) and decentralization. Understanding halving cycles, network security mechanisms, and on-chain governance is crucial for long-term investment decisions. Don’t be misled by short-term price fluctuations; grasp the fundamental logic.

Step 2: Develop a Clear Investment Plan

Define target returns, risk tolerance, and investment horizon. Aggressive strategies seeking short-term gains differ greatly from conservative long-term holding. It is recommended to divide investments into three layers: core holdings (50%) for long-term appreciation, trading (30%) for short-term opportunities, and risk exploration (20%) for emerging opportunities.

Step 3: Choose Reliable Trading Platforms

Platform security directly affects fund safety. Ensure exchanges have cold storage, multi-signature authentication, regular security audits, etc. Also compare fees, liquidity, and user experience across platforms.

Step 4: Secure Storage Solutions

For short-term trading, funds can be kept on exchange accounts with two-factor authentication enabled; for medium to long-term holdings, transfer to hardware wallets. Hardware wallets are completely offline, less vulnerable to hacking, and ideal for large, long-term positions.

Step 5: Stay Updated on Market Dynamics

Regularly monitor policy changes (especially U.S. regulatory developments), technological upgrades (such as OP_CAT enabling Layer-2 scaling), and macroeconomic conditions. These signals often precede market reactions and can help optimize timing.

Step 6: Risk Management Principles

Set stop-loss levels, avoid full leverage, and refrain from chasing highs in extreme greed—these are necessary measures to protect funds in volatile markets. Many lose profits at the end of bull markets due to greed.

Step 7: Tax Planning

Tax policies on cryptocurrencies vary greatly across countries. Understand your local regulations, keep detailed transaction records, and plan accordingly to avoid future troubles.

New Variables for Future Bull Markets

Bitcoin as a Strategic Reserve Asset

El Salvador has already adopted BTC as legal tender, and Bhutan has accumulated over 13,000 BTC through government funds. If the U.S. follows suit, global government demand could surge, becoming a long-term support factor for Bitcoin prices.

Imaginative Space for Technological Upgrades

Post-OP_CAT code revival, Bitcoin may support more complex smart contracts, enable Layer-2 scaling solutions, and process thousands of transactions per second. This evolution could transform Bitcoin from a simple store of value into a programmable asset, opening possibilities for DeFi applications and directly competing with Ethereum’s functionality.

Continuous Innovation in Institutional Products

Beyond spot ETFs, futures, structured products, and alternative funds will continue to emerge. These products lower barriers for institutional participation and attract more traditional financial capital.

Predictability of Halving Cycles

The next halving is expected around 2028. Historically, 6-12 months before halving is a buying opportunity, and 12-18 months after halving is a harvesting period. This predictability provides a framework for long-term investors.

Current Market Status and Outlook

BTC is at $87,780, still below the all-time high of $126,080, leaving room for further gains, but short-term corrections are possible. The 24-hour change is -0.07%, indicating the market is digesting recent moves. With an annual change of -11.62%, Bitcoin remains in a correction phase, and the long-term trend has not yet been fully established.

The 50:50 bullish-bearish sentiment ratio among market participants indicates ongoing disagreement, which is both a risk and an opportunity. For cautious investors, waiting for clearer signals may be wiser; for those already involved, protecting existing gains is equally important.

Final Recommendations

The start of a Bitcoin bull market will not be marked by flowers and applause but will quietly unfold amid skepticism. When all indicators confirm the trend and everyone is optimistic, it is often the most dangerous moment.

True investors should think this way:

• Study when others are fearful, accumulate when fear is extreme
• Beware when others are greedy, reduce positions when greed peaks
• Avoid perfect buy/sell points; pursue a reasonable risk-reward ratio

Has the bull market already started? The answer is: when you stop obsessing over this question and focus on executing your plan, you are already doing the right thing.