What drives bitcoin prices?
bitcoin price predictions
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A bitcoin cycle is 4-year period
This 4 year comes from the halving cycle.
The halving cycle means that every 210,000 blocks or approximately 4 years, the halving reward or the bitcoin mined is being cut in half.
That’s where the 4-year cycle came from.
It seems that every 4-year cycle goes like this, the halving year marks the start of early bull, then the next year after the halving will be the parabolic bull run, then followed by a 2-year bear market drawdown where bitcoin historically goes down as low as 70% from the bull market peak.
The 2024 halving was the 4th halving. So, if that’s the case:
2024 - early bull
2025 - parabolic bull run (top)
2026 - early bear market
2027 - bear market (bottom)
🤔What drives bitcoin prices?
So, is it the halving that drives the bitcoin prices?
Does the supply shock of halving drives bitcoin prices to go parabolic?
Some say yes some say no.
Others say that it is Liquidity.
Liquidity is the total amount of money injected into the system.
Here is a good interview of one of the OG bitcoiners Dr. Jeff Ross explaining the concept of liquidity.
Some say’s that investor psychology is what drives the 4-year cycle, bitcoiners anticipate the 2-year bull then 2 years down trend and trade according to this.
One thing is for sure though, no one can say for certain what drives the bitcoin 4-year cycle.
But we don’t have to know, because the best way to hold bitcoin is to just stack and hodl.
Time in the market beats timing the market.
Selling bitcoin is a personal decision. No one can give you advice. Everyone’s circumstances is different.
But I think the costly mistake over the long run is to have less bitcoin than what you have. If you must sell, don’t sell it all. The name of the game is to have many bitcoin as much as you can. Because it is an asset that will continually to go up forever.
Because governments keep on debasing the money. But bitcoin does not go up in straight line. It will be volatile. There will be times when you wish you had sell.
Maybe it will go to $500k or $1 million and you didn’t sell then crash to $100,000. You will think you are an idiot. But remember, there are people who sold bitcoin at $1,000 then price crashes to $100, and they thought they were genius at the time they sold it.
When price rose to $20,000 and people sold then price crash to $3,000, they thought they were geniuses also.
Personally, I plan on selling on the bull run but not more that 10% of my stack or whatever I need in fiat terms as long as it does not exceed 10% of my SATS.
But as general rule, I don’t want to sell more than 10% of my stack in BTC terms.
If we didn’t have a parabolic phase, I may not sell. If price top is $100k, I may not sell.
I’ve said before that I am expecting a bitcoin top of $200k to $450k, around Q4 of 2025.
If those targets are hit, I might sell some.
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