Image: “Bitcoins.jpg” by Jorge Franganillo, licensed CC BY 2.0, source: Wikimedia Commons
The classic 4-year cycle says: after every halving comes a bull market, then a brutal bear market – and the bottom almost always falls in the same window, roughly 360 to 410 days after the all-time high. Following that pattern, Bitcoin should find its bottom in the next 90 days or so, with $40,000 frequently cited as the target. The problem: the market isn’t currently following the script.
The October Thesis: Where the $40,000 Number Comes From
The idea of a Bitcoin bottom in October rests on a historical pattern: in every previous cycle, price first hit a new all-time high after the halving, then a severe decline followed, whose low point has always fallen in the same seasonal window around the fourth quarter.
The $40,000 mark itself isn’t a hard, data-derived number – it’s a psychologically anchored threshold many market participants keep in mind. In the past three cycles, Bitcoin fell 85%, 84%, and 77% from its high. A drop to $40,000 this time would represent a drawdown of roughly 68% – which would actually fit the pattern of bear markets getting milder with each cycle.
What Argues Against the Old Script
While many market participants have been waiting for exactly this autumn bottom, Bitcoin has done something that has never happened in a bear market before: three consecutive green months – July, August, and September 2026. On top of that, price has reclaimed the 365-day moving average, a signal that, according to market observers, has preceded every subsequent bull market since 2019. At around $90,000, Bitcoin was recently only about 30% below its all-time high, per Glassnode data.
This combination – three green months plus reclaiming the long-term trend line – is historically considered more a signal of transition into a new bull market than a sign of an imminent final crash. A brief final bottom-test isn’t ruled out, but it becomes less likely with every additional week that passes without a major crash.
Why the Cycles Are Shrinking
An often-overlooked aspect: Bitcoin’s cycles get weaker with each repetition. From bottom to top, price gained 560x in the first observed cycle, 108x in the second, 21x in the third, and only about 8x in the most recent one.
Crashes are getting shallower too: 86%, 84%, 77%, and most recently 54% drawdown, per Glassnode data. Even the time span of the cycles is increasingly compressing. The reason: the larger and more mature the Bitcoin market becomes, and the more institutional capital flows in via ETFs, corporations, and even nation-states, the less weight the original halving supply effect carries.
The Real Driver: Global Liquidity, Not the Halving
The entire October-bottom thesis hinges on the 4-year cycle, which in turn hinges on the halving mechanism. But the halving has lost significant weight in practice: the last halving cut new Bitcoin supply by roughly $40 million per day. The overall market, however, is now worth trillions of dollars, and Bitcoin ETFs alone can absorb over $500 million in capital on strong trading days – twelve times the daily supply effect from the halving.
Under this reading, the real driver is global liquidity: when does cheap money enter the system, and when is it withdrawn again? The correlation between the M2 money supply and Bitcoin’s price has historically been high, and this liquidity cycle has tracked almost exactly with the halving cycle in recent years – which is why the halving got all the attention, while macro liquidity was doing the actual work in the background. And that liquidity is picking up again.
New Factors the Old Cycle Doesn’t Account For
The classic 4-year cycle simply doesn’t account for several current developments: the US Treasury is turning the money tap back on with billions in Treasury buybacks, and US government bond yields are climbing sharply – the 10-year yield hit its highest level since 2007, according to the Kobeissi Letter.
This is exactly the environment in which the so-called debasement narrative gains traction – the fear of a creeping devaluation of fiat currency. These factors, not a calendar page from 2018, are what’s actually moving the market right now, per this assessment.
Bottom Line: A Pattern, Not a Law of Nature
The $40,000-in-October thesis remains a clean historical pattern on paper, consistent with the 4-year rhythm of previous cycles. In market reality, however, several factors currently argue against it: three consecutive green months, the reclaimed 365-day line, a significantly weakened halving effect, and accelerating global liquidity.
Anyone treating the old cycle as an unquestioned blueprint for the future risks being wrong exactly when it matters most. Bitcoin cycles are a recurring pattern, not a law of nature – and this time around, considerably more new forces are in play than in the previous three.
