The Deep Secrets of Bitcoin Bull Market Cycles: From Bottom Breakthrough to All-Time High

Since its inception in 2009, Bitcoin has experienced multiple intense cycles of bull and bear markets. The latest data shows that BTC’s current price has reached $88.68K, still room to rise toward its all-time high of $126.08K. These cyclical surges are not random but driven by specific market events and structural factors. This article analyzes several key bull market cycles in Bitcoin’s history to reveal how this digital asset has become one of the most attractive investment targets in mainstream finance.

The Essence of Bull Market Cycles: Scarcity of Supply and Demand Expansion

The core of Bitcoin’s bull-bear cycles lies in a simple economic principle—mismatch between limited supply and growing demand. The fixed total supply of 21 million coins, combined with the halving events occurring every four years, forms the underlying logic behind Bitcoin’s price appreciation.

Each halving effectively reduces the rate of new coin issuance, and this artificially created scarcity often triggers strong market reactions. Historical data shows:

• After the 2012 halving, Bitcoin surged by 5200%
• After the 2016 halving, the increase was 315%
• After the 2020 halving, the rise was 230%

This decreasing rate of gains reflects the market’s gradual maturation and rational pricing process. As institutional investors enter, the gains driven solely by supply shocks begin to diminish.

2013: The Retail Era’s Frenzy

Bitcoin’s first wave of mainstream adoption occurred in 2013. In just seven months, this asset skyrocketed from $145 to $1,200, a 730% increase. This rally was driven by three forces:

First, intensive media coverage. When Bitcoin broke the $1,000 barrier, major financial media and mainstream news outlets began extensive reporting, bringing this unfamiliar digital asset into the living rooms of millions. FOMO quickly spread, boosting demand.

Second, geopolitical events as catalysts. The Cyprus banking crisis in 2013 made investors realize that traditional financial systems also carry risks. Moving assets into decentralized assets like Bitcoin became a risk hedge.

Third, improvements in ecosystem infrastructure. More exchanges launched, wallet apps became user-friendly, and the barriers to buying Bitcoin significantly lowered.

However, this bull market ended with the Mt. Gox exchange hack in early 2014. At that time, Mt. Gox handled about 70% of global Bitcoin transactions. The loss triggered a trust crisis, and prices fell below $300, a 75% decline.

2017: The Retail Army’s Gathering

Four years later, Bitcoin exploded again. It rose from $1,000 to nearly $20,000, a staggering 1900% increase. Unlike the frenzy of 2013, 2017 was characterized by organized and institutionalized speculation.

At this time, the ICO boom was sweeping globally. Thousands of new projects raised funds by issuing tokens, attracting massive retail capital. To participate in ICOs, investors needed to buy Bitcoin or Ethereum as “entry currency,” directly boosting Bitcoin demand.

Daily trading volume rose from less than $200 million at the start of the year to over $1.5 billion by year-end—a 70-fold increase. This indicated more participants, deeper liquidity, and higher market heat.

However, regulatory risks also emerged. Chinese authorities announced bans on ICOs and shut down domestic exchanges, sending a clear negative signal. Coupled with the U.S. SEC’s concerns over market manipulation, the $20,000 peak at the end of 2017 marked the top of this cycle. In 2018, Bitcoin fell 84%, dropping from $20,000 to $3,200, causing many late entrants to suffer losses.

2020-2021: Institutional Capital Enters

The 2020 bull cycle fundamentally changed Bitcoin’s identity—from a “retail gambling asset” to an “institutional allocation asset.”

Post-pandemic, global central banks flooded the economy with liquidity, and the Federal Reserve cut interest rates to zero. Under this backdrop, institutional investors began reassessing asset allocations. Companies like Square, MicroStrategy, and Tesla announced Bitcoin purchases, with the simple rationale: in a zero-interest-rate environment, Bitcoin is more worthwhile than cash.

The most compelling data: MicroStrategy alone bought 125,000 BTC; institutional fund inflows exceeded $1 billion; Bitcoin’s price rose from $8,000 to $64,000, a 700% increase.

This period also saw the emergence of futures products. In late 2020, CME launched Bitcoin futures, providing standardized trading tools for institutional investors. This meant pension funds, insurance companies, and other traditional institutions could participate via futures contracts without directly holding the assets.

However, by mid-2021, a combination of regulatory warnings, environmental concerns, high leverage liquidations, and other factors caused the price to fall from $64,000 to $30,000—a 53% decline. This correction showed that even with institutional support, Bitcoin’s volatility remains significant.

2024-2025: Spot ETF Changes the Game

The current bull cycle features new characteristics. In January 2024, the U.S. SEC approved the first spot Bitcoin ETFs. This decision is more significant than it appears—opening a door for millions of traditional investors without crypto accounts to gain exposure through familiar securities accounts.

The data is astonishing: within a year, inflows into spot Bitcoin ETFs exceeded $2.8 billion, surpassing the historical performance of gold ETFs. BlackRock’s IBIT fund alone holds 467,000 BTC. What does this mean? Major traditional financial giants are redefining their investment frameworks.

Meanwhile, the April 2024 halving once again intensifies supply-side pressure. The block reward drops from 6.25 BTC to 3.125 BTC, halving new coin issuance, while institutional demand remains strong or even increases.

This “reduced supply + increased demand” perfect storm pushed Bitcoin from $40,000 to a peak of $88.68K (with an all-time high of $126.08K). A 132% increase, once again demonstrating its strong capital attraction capability.

Technical Signals for the Bull Market: How to Catch the Bottom?

For investors aiming to seize the next opportunity, several technical indicators are worth monitoring:

RSI Indicator is key for assessing buying and selling momentum. When RSI exceeds 70, it signals strong buying; below 30 indicates oversold conditions. During 2024, Bitcoin’s RSI repeatedly broke above 70, confirming the strength of the upward trend.

Moving Averages are equally important. Especially the relationship between the 50-day and 200-day moving averages—when the fast (50-day) moving average is above the slow (200-day), it indicates a medium-term uptrend; the opposite signals a downtrend. Historically, Bitcoin breaking above the 200-day MA often marked the start of a new bull cycle.

On-Chain Data provides deeper insights into market participants’ intentions. For example:

• Declining exchange balances suggest accumulation rather than distribution
• Rising whale wallet activity indicates possible institutional positioning
• Increased stablecoin inflows into exchanges signal readiness to buy

Currently, Bitcoin holdings on exchanges are at historic lows, implying holders prefer self-custody—an optimistic sign.

Preparing for the Next Bull Run: Five Core Recommendations

First, choose secure participation channels. If you have accounts with traditional financial institutions, buying a spot Bitcoin ETF might be the easiest route. For direct holdings, select a reputable trading platform with:

• Complete security certification (two-factor authentication, cold storage)
• Regular security audits
• Genuine protection of user funds

Second, understand your risk tolerance. Bitcoin’s history shows that a 40% weekly decline is possible. If such volatility keeps you awake at night, avoid investing more than you can afford to lose. Even long-term believers should only invest funds they are willing to lose entirely.

Third, build a diversified position strategy. Avoid investing all at once. Successful investors often use “dollar-cost averaging”—buying gradually at different price points—to smooth short-term risks. Remember, Bitcoin should be part of a diversified portfolio to reduce overall risk.

Fourth, safeguard your assets. If planning to hold long-term, hardware wallets are essential. Storing Bitcoin on exchanges is like keeping cash at someone else’s house—convenient but risky. Lessons from Mt. Gox and FTX show that exchange risks are real and persistent.

Fifth, stay alert to macroeconomic and policy changes. Federal Reserve interest rate policies, government regulations, corporate Bitcoin reserves—these factors can significantly impact Bitcoin prices. Maintaining awareness is crucial for survival in this market.

The Three Major Variables Ahead

Government Reserve Assetization. A proposed Bitcoin Act 2024 by U.S. senators suggests the U.S. Treasury could buy 1 million BTC over five years as strategic reserves. If realized, this would send an unprecedented demand signal. Currently, only Bhutan (via Druk Holding & Investments with 13,000 BTC) and El Salvador (5,875 BTC) hold Bitcoin at the government level. If the U.S. joins, a “global government Bitcoin race” could emerge.

Technological Upgrades and Functionality Expansion. The Bitcoin community is discussing restoring the OP_CAT opcode, which could unlock Layer-2 scaling solutions allowing thousands of transactions per second. This would transform Bitcoin from a simple store of value into a practical payment network, shifting its analogy from gold to Visa.

Mature Regulatory Frameworks. As Bitcoin’s role in finance grows, regulations will become clearer and stricter. Ironically, clearer rules can boost confidence among traditional investors—uncertainty being eliminated—potentially driving a new wave of institutional capital.

Conclusion: Cycles Are Here to Stay

Bitcoin’s history has proven one fundamental point—its cyclical nature is intrinsic. From $145 to $1,200, from $1,000 to $20,000, from $8,000 to $64,000, and now over $88,000, each cycle has different drivers but shares the expansion of market participants and upgrading of investment frameworks.

When will the next bull market arrive? No one can predict precisely. But based on halving cycles (the next halving in 2028), the continuous attraction of spot ETFs for institutional funds, and potential government strategic reserves, the probability of maintaining upward momentum in the medium term (1-2 years) is quite high.

The key is: don’t try to time the market perfectly. Use a dollar-cost averaging approach, prepare for long-term holding, and always be ready for a 50% correction. Historical data shows that those who endure the darkest times ultimately become winners.

Bitcoin is not a gambling game to get rich overnight—at least, it shouldn’t be. It is an experiment rewriting global financial logic, and the best way to participate is with rationality, patience, and risk management for the long haul.