Following a recent flash crash, some crypto leaders claim the true bull market is just beginning. This narrative contrasts with the market's strong recovery from 2022 lows. Analysts question if it aligns with Bitcoin's four-year cycle theory.
In the wake of the crypto flash crash on October 10, prominent figures in the sector are promoting the idea that the real bull market has yet to start. This message resonates with investors seeking to recoup losses from the downturn.
Crypto markets are often viewed through the lens of a four-year cycle tied to Bitcoin's halving events. According to this theory, the cycle includes a bear market year starting two years before the halving, followed by a recovery year leading to the halving, a year of strong growth, and a final year of parabolic gains ending in a crash. Currently, the market is believed to be in the final months of a vigorous upward run.
Historical data supports significant gains since the 2022 lows. Bitcoin reached a bottom near $15,500 during the FTX exchange collapse in November 2022 and now trades near $102,000, representing a multiple-fold increase. Ethereum fell to about $880 in mid-June 2022 and currently sits near $3,450. Solana dropped to around $8 in late 2022 and now trades at $153. These patterns align with bull market characteristics, challenging claims of an impending new phase.
Market structure has evolved with the introduction of spot exchange-traded funds (ETFs) for Bitcoin, Ethereum, and Solana. These funds attract continuous buying from retirement accounts and institutions, with record weekly inflows in early October led by U.S. ETFs. On-chain activity is also rising, as seen in Solana's elevated daily transactions and active users, alongside Ethereum's sustained ecosystem traction.
While the cycle theory suggests no broad bull run for at least a few quarters, durable drivers like institutional inflows and growing economic activity on blockchains could support higher prices. Investors are advised to focus on accumulating quality assets and holding for a five-year horizon, regardless of cycle validity.