Bitcoin’s Price Corrections: A New Paradigm?
Cathie Wood, CEO of investment firm Ark Invest, proposes a scenario where the structure of Bitcoin’s price corrections has evolved. According to her perspective, the maturity of the asset is shortening contraction periods, leading to unprecedented stability. In fact, Wood maintains that Bitcoin is currently in a shorter bearish cycle compared to historical records.
The Four-Year Cycle Theory
The narrative that has dominated price analysis since Bitcoin’s inception is based on the halving, a technical event that halves the reward for mining Bitcoin. Historically, the halving has marked cycles where every four years, bullish and bearish Bitcoin markets are experienced. This means that after three years of moderate and strong increases, the fourth year (2026) becomes the bearish market phase.
However, Wood argues that there was not “a very strong bullish cycle for Bitcoin standards.” Therefore, she believes that the current bearish cycle is “quite advanced,” suggesting that it may test the range of $80,000 to $90,000 for Bitcoin.
This perspective implies that the expected correction after reaching historical highs last October will not be as deep or prolonged as in previous cycles. For Wood, the resistance demonstrated at high price levels is a symptom of a paradigm shift.
“We do believe that this test will be successful. It will be the shallowest drop in the four-year cycle in Bitcoin’s short history. And then, we will take off again,” comments Wood, emphasizing that the capital structure supporting Bitcoin has shifted from being purely speculative to having a robust institutional component.
Factors Driving the Short Bitcoin Bearish Cycle
Wood’s thesis is based on the intrinsic value that Bitcoin brings to the financial system. She defines this asset as “three revolutions in one”: a global monetary system, a technological revolution, and the leader of a new asset class.
For this reason, downturn periods tend to dissolve more quickly. Institutional demand seeks protection against inflation, allowing a short Bitcoin bearish cycle to establish itself as the new norm in the face of previous years’ crises.
Institutional and Regulatory Impact
The prospect of a shorter and shallower cycle is shared by other Wall Street players managing Bitcoin exchange-traded funds (ETFs). Matt Hougan, Chief Investment Officer of Bitwise, agrees that the traditional four-year cycle could be undergoing a significant alteration.
According to Hougan, this phenomenon occurs “due to growing institutional interest and regulatory changes in the United States, regardless of the halving, which until now have been the main drivers.”
The entry of large-scale capital through regulated instruments has created a support floor that did not previously exist. Hougan attributes this change, in part, to favorable regulations in the United States with the creation of a national reserve of digital assets, the establishment of a Digital Assets Advisory Commission, and regulations such as the Genius Law.
These factors act as buffers that prevent the digital currency’s price from experiencing stronger falls, accelerating market recovery.
Diverging Opinions on Bitcoin’s Cycle
Despite the optimism of Ark Invest and Bitwise, not all specialists agree with the idea of a short or shallow bearish cycle. Henrik Zeberg, Chief Economist at SwissBlock, warns that Bitcoin is not the safe haven many believe, but a high-risk asset.
According to Zeberg, its “correlation with stock markets, especially the Nasdaq, could drag it into a devastating fall” if a global recession occurs.
On the other hand, Willy Woo, an analyst and also a SwissBlock contributor, maintains that Bitcoin is in the final phase of its bullish market. Although he acknowledges that “there is still room” for new increases, he predicts a significant drop after these highs.
“We expect a BTC bear market once global macroeconomic markets change,” Woo asserts, suggesting that global liquidity remains the main driver over theories of shortened cycles.
The resolution of this debate will depend on how Bitcoin reacts to the support range mentioned by Wood. If the price manages to consolidate above $80,000 during the upcoming economic turbulence, the four-year cycle theory could become obsolete, confirming that this digital asset has entered a maturity phase where bear markets are merely brief pauses in a long-term upward trend.
