The price of Bitcoin is often explained by a certain 'dominant cause': sometimes due to the 4-year halving cycle, sometimes due to macro liquidity, and at other times due to speculative demand. However, this one-dimensional view overlooks the fact that BTC operates in a complex economic environment where multiple forces act simultaneously and interact with each other.
Bitcoin does not exist in a vacuum. It is both a digital asset with a fixed supply mechanism and a risky asset influenced by global liquidity cycles. Therefore, trying to encapsulate price volatility in a simple narrative often leads to misunderstanding the nature of market movements.
When Halving Cycle and Macro Cycle Intersect
Analyst Giovanni emphasized that the halving cycle – which is strongly driven by FOMO effects and social feedback loops – still plays an important role in the structure of the Bitcoin market. The fixed schedule of block reward halving is a mechanical change that directly impacts miners’ economics.
When the reward decreases, the marginal cost of mining changes, selling pressure from miners may adjust, and this trickles throughout the entire BTC ecosystem. Halving is not an 'illusion,' but a real variable that exists in the supply model of Bitcoin.
However, that does not mean halving explains everything.
Parallel to Bitcoin's internal cycle is the macroeconomic cycle, reflected in indicators such as PMI (Purchasing Managers’ Index). Interestingly, PMI has also shown a cyclical nature of about 4 years. This raises an important question: Are we witnessing an interaction between two different cycles – an endogenous cycle (halving) and an exogenous cycle (macro)?
The shift from the argument that 'the 4-year cycle is merely an illusion' to 'the 4-year cycle explains everything' is simply replacing one simplification with another. A more appropriate approach is to quantify the interactions between these cycles.
In mathematics and econometrics, there have been research tools on cycle coupling, phase alignment, and interaction effects. When applying these methods, it is likely that we will not receive a simple narrative, but rather a more complex structure where internal and external cycles continuously intertwine.
15-Minute Probability Model: Is the Market Being Controlled by Bots?
From another perspective, the analyst nicknamed The Smart Ape has developed a theoretical probability model to estimate the likelihood of Bitcoin price increases or decreases in 15-minute markets on Polymarket.
This model is extremely simple: it only uses three variables including:
Target Price
Current BTC Price
Time remaining before the market cycle ends
It is noteworthy that the model's results closely match the actual probabilities as priced by the market, with a deviation of only about 1–5%.
In prediction markets like Polymarket, probabilities are formed directly from participants' transactions. When market probabilities closely align with such a simple mathematical model, it suggests that trading behavior is strongly influenced by algorithms and bots.
If the market is primarily driven by human emotions, the actual probabilities are unlikely to maintain such a high level of synchronization with the theoretical model. This reflects a reality: in the short time frame, especially 15 minutes, the market structure is increasingly mechanized.
Bitcoin Is a Multilayered System, Not Just a Story
From both perspectives – long-term cycles and short-term models – a common point can be drawn: Bitcoin is a multilayered system.
At the long-term structural level: halving affects supply and miner economics.
At the macro level: liquidity, interest rates, and the global economic cycle affect risk cash flows.
At the micro level: algorithms and bots shape short-term volatility.
The BTC price is the result of the overlap between these layers, rather than the product of a single variable.
The attempt to find a 'dominant story' helps the market understand better in terms of communication, but it impoverishes the ability to analyze reality. Meanwhile, a quantitative approach – though more complex – can help us see the interaction structure between influencing forces.
Bitcoin is not simple. And perhaps that is why it remains one of the most elusive assets of the digital finance era.
