Market Cycles

The recurring sequence

Cycles often begin quietly: forced sellers are exhausted, builders continue, and liquidity improves. Rising prices attract attention; attention attracts capital; capital validates a new narrative. Leverage then amplifies both confidence and fragility.

1. Accumulation: low attention and improving fundamentals.
2. Expansion: broader participation and accelerating narratives.
3. Euphoria: leverage, weak diligence, and reflexive demand.
4. Contraction: liquidations, defaults, and a return to fundamentals.

The Bitcoin halving

Roughly every four years, Bitcoin's subsidy per block is cut in half. This reduces new supply, but the event is known in advance. Its impact depends on demand, miner economics, macro liquidity, and market positioning—not scarcity alone.

Historical alignment does not establish a mechanical law. With each cycle, new issuance becomes smaller relative to existing supply and global capital flows.

Liquidity and leverage

Crypto trades around the clock and often uses collateral that rises with the market. In expansions, higher collateral values support more borrowing. In contractions, falling collateral triggers sales, which pushes prices lower and triggers further liquidations.

Using cycles responsibly

Treat cycle models as scenario tools. Track valuation, realised behaviour, funding, stablecoin supply, credit conditions, and the distance between price and genuine adoption. Avoid decisions that require a single historical pattern to repeat on schedule.