Bitcoin’s (BTC) latest price correction is reinforcing rather than disrupting the long-standing 4-year halving cycle that has historically influenced the asset’s market behavior, according to a new report from Kaiko Research.
This debate has significant implications for how traders and investors deal with Bitcoin’s volatility in early 2026.
In early February, Bitcoin fell from a cycle peak near $126,000 to a range of $60,000 to $70,000. This marks a reduction of approximately 52%.
Although the move disrupted market sentiment, Keko believes that this decline is fully consistent with the previous post-halving bear market and does not represent a structural break from historical patterns.
“Bitcoin’s drop from $126,000 to $60,000 confirms, rather than contradicts, the four-year halving cycle, which follows a sustained decline of 50-80% after the cycle peak,” Kaiko’s data briefing reads.
The report states that the 2024 halving will occur in April. Bitcoin peaks approximately 12-18 months later, closely correlating with previous cycles. In the past, such peaks have typically been followed by a secular bear market that lasted about a year before entering the next accumulation phase.
Kaiko said that the current price trend indicates that Bitcoin has transitioned from the post-halving euphoria phase to the expected adjustment period.
It is worth noting that many experts have previously questioned Bitcoin’s four-year cycle. They believe it is no longer relevant in today’s market. In October, Arthur Hayes stated that the 4-year Bitcoin cycle was over. Instead, he pointed to global liquidity as the main driver of price movements.
Others believe that Bitcoin now follows a 5-year cycle instead of a 4-year cycle. They point to the growing influence of global liquidity conditions, institutional engagement and broader macroeconomic policy shifts.
Kaiko acknowledged that structural changes, including the adoption of spot Bitcoin exchange-traded funds (ETFs), greater regulatory clarity, and a more mature DeFi ecosystem, make 2024-2025 different from previous cycles. Still, the company said these developments did not prevent an expected post-peak pullback.
Instead, they change how volatility behaves. Spot Bitcoin ETFs saw outflows of more than $2.1 billion during the recent sell-off.
This amplifies downward pressure and suggests that institutional access increases liquidity in both directions, not just on the upside. According to Keke,
“While DeFi infrastructure has shown relative resilience compared to 2022, declining TVL and slowing staking traffic suggest that no industry is immune to bear market dynamics. Regulatory clarity has proven insufficient to decouple cryptocurrencies from broader macro risk factors, with uncertainty about the Federal Reserve and weakness in risk assets dominating market direction.”
Kaiko also raised the key question currently dominating market discussions: where is the bottom? The report explains that Bitcoin’s intraday rebound from $60,000 to $70,000 indicates that initial support may be forming.
However, historical precedent shows that bear markets typically take 6 to 12 months and experience multiple failed rallies before establishing a sustainable bottom.
Kaiko noted that stablecoin dominance is at 10.3%, while funding rates have dropped to near zero and futures open interest is down about 55%, indicating that the entire market is deleveraging significantly. However, the company warned that it was unclear whether the current situation represented an early, mid-term or late capitulation.
“The four-year cycle framework predicts that we should reach the 30% level. Bitcoin is performing exactly as it has been in every previous cycle, but it seems that many market participants believe that it will be different this time around,” Kaiko wrote.
As February 2026 approaches, market participants must weigh both sides of this argument. Bitcoin’s next move will reveal whether history continues to repeat itself or whether a new market regime is taking shape.
Read original story “Bitcoin’s four-year cycle intact, and latest sell-off shows why” by Kamina Bashir at beincrypto.com