Bitcoin Bull Market Cycle: The Evolution from $67 Historical Low to $126K Historical High

Since its inception in 2009, Bitcoin has experienced multiple distinct market phases. Now, as BTC reaches a record high of $126K, the market is testing an ancient principle—how the four-year supply shock (via halving events) drives this largest crypto asset through a cycle rotation. To understand the current price position of $86.95K, we need to analyze several key bull market cycles over the past decade.

How Supply Scarcity Drives Bull Markets: Pattern Recognition from 2012 to 2024

Bitcoin’s uniqueness lies in its fixed supply cap: 21 million coins. Every four years, the system automatically reduces the new coin generation rate by 50%—this is the “halving” event. Historical data shows this mechanism is highly correlated with the most explosive bull markets.

After the 2012 halving, BTC started from just a few dollars, breaking $1,000 for the first time in 2013, with an increase of over 5200%. Although this rise was shadowed by the Mt.Gox exchange collapse in 2014, it ultimately proved market resilience. The second halving in 2016 again validated this pattern—subsequently, in 2017, BTC surged from $1,000 to $20,000, a 1900% increase.

The third halving occurred in 2020, after which Bitcoin hit a record high of $64,000 in April 2021, a 700% increase. Each halving compresses supply, and the market’s ability to price in this scarcity has never disappointed investors.

How ETF Approvals Change the Game: Institutional Capital Influx

The event in 2024 marks a critical turning point. In January, the US SEC approved a spot Bitcoin ETF, opening a regulated channel for traditional financial institutions to enter crypto assets. By November, these ETFs had net inflows exceeding $2.8 billion, far surpassing the growth rate of gold ETFs during the same period.

This large-scale institutional capital influx is deeply significant. BlackRock’s iBIT ETF alone holds over 467,000 BTC, and the total holdings of all Bitcoin ETFs have surpassed 1 million coins. This shifts the participant structure—from a retail-dominated “gamblers’ market” to an institutional-driven “asset allocation market.”

Against this backdrop, BTC has risen from $40,000 at the start of the year to a high of $89.57K, a 132% increase. Even at the current $86.95K, it still represents over a 117% gain from the beginning of the year.

Technical Signals: On-Chain Data and Traditional Indicators in Sync

Identifying bull markets isn’t solely reliant on price. Professional traders observe multi-dimensional signals:

1. Relative Strength Index (RSI) signals

In the 2024-25 bull market, Bitcoin’s RSI has broken above 70, typically indicating strong upward momentum. Unlike the 2017 retail-driven runaway rally, this RSI breakout has not led to immediate collapse but has instead oscillated, indicating sustained buying strength.

2. On-chain activity validation

Key indicators include:

• Exchange holdings reaching historic lows, indicating retail investors are storing funds in “cold storage” (self-custody)
• Stablecoin inflows to exchanges reversing from continuous net outflows to increased volatility
• Wallet addresses surpassing 55.1 million, hitting a record high

These data suggest Bitcoin ownership is shifting from speculators to long-term holders.

3. Macro-economic context

Policy shifts in 2024—especially signals of a friendly crypto stance in the US—provide additional fundamental support for this rally. The peak of the rate hike cycle also prompts investors to reconsider alternative asset allocations.

Common Features and Differences in Past Bull Markets

( 2013: Enthusiasm of Technical Beginners

• Price change: $145→$1,200 (+730%)
• Main catalysts: media hype, Cyprus bank crisis, early adoption by tech geeks
• Risk event: Mt.Gox collapse, leading to a prolonged bear market

) 2017: Retail Participation Explosion

• Price change: $1,000→$20,000 (+1900%)
• Main catalysts: ICO boom, emergence of zero-commission exchanges, FOMO among the masses
• Risk event: Chinese regulatory bans, overseas strict controls, triggering an 84% deep correction

2021: Institutional Recognition Begins

• Price change: $8,000→$64,000 (+700%)
• Main catalysts: MicroStrategy, Tesla, and other corporate holdings, COVID-era money printing, “digital gold” narrative
• Risk event: Environmental concerns intensify, regulatory uncertainties

2024-25: Institutional Asset Establishment

• Price change: $40,000→$89.57K (+132%, current $86.95K)
• Main catalysts: Spot ETF approval, fourth halving, policy shifts
• Potential risks: liquidity risks amid high volatility, macroeconomic recession fears, interest rate rebounds

Key Variables for the Next Bull Market

Long-term Supply Scarcity

Bitcoin has about 8 years until the next halving. During this period, the tightness of circulating supply will gradually intensify—especially as governments (e.g., El Salvador, Bhutan) and listed companies (MicroStrategy holding 214,000 coins) continue accumulating.

Senator Cynthia Lummis’s “2024 Bitcoin Act” proposes that the US Treasury acquire 1 million BTC over five years. If implemented, this would create a structural positive for global Bitcoin demand.

Application of Technological Upgrades

The restoration of OP_CAT code is expected to introduce Layer-2 scaling solutions (Rollups) for Bitcoin, potentially increasing transaction throughput to thousands per second. This could enable DeFi applications on Bitcoin, challenging Ethereum’s dominance in this field.

Continued Evolution of Institutional Holdings

The success of spot ETFs is just the beginning. Futures contracts, structured derivatives, and potential Bitcoin trusts (such as Grayscale’s expansion) will attract larger institutional funds.

Preparing for the Next Bull Market: Practical Tips

1. Establish a risk assessment framework – Historical cycles show retracements of up to 80% or more from peak to trough. Setting stop-losses and cautious position sizing are essential.

2. Track supply indicators, not just price – Observe exchange holdings, whale wallet movements, and stablecoin flows, which often signal earlier than price movements.

3. Diversify investment timing – Avoid trying to perfectly time the market. Use dollar-cost averaging to smooth out volatility.

4. Understand regulatory variables – Policies vary across jurisdictions. The US is more friendly, while the EU is more cautious. Adjust expectations accordingly.

5. Choose reliable trading infrastructure – Secure custody, sufficient liquidity, low fees. Infrastructure failures during bull markets can lead to significant losses.

Summary: The Convergence of Rules and Opportunities

Bitcoin’s bull cycles reflect a simple yet powerful economic principle—the interaction of supply scarcity and demand growth. From the first breakthrough at $1,200 in 2013 to the recent high of $126K in 2024, this curve records not only price but also the evolution of human understanding of this innovative asset.

While the current $86.95K is below the all-time high, the market participant structure—significant institutional share, improved liquidity depth, clearer policy environment—all point toward a more mature and resilient market.

The arrival of the next bull market is not a question of “if” but “when” and “how big.” The key is whether you are fully prepared for this historic cycle.