Most analysts have dismissed the hypothesis of Bitcoin's 4-year cycle [BTC], claiming that this narrative has come to an end. Among them is James Lavish, a partner at Bitcoin Opportunity Fund.

James Lavish discusses the 4-year cycle of Bitcoin

James Lavish stated last year that the new liquidity cycle is the driving force behind prices, making Bitcoin's halving cycles less significant. He admitted he was wrong when BTC continued to reach a new all-time high of 126,000 USD. Lavish said:

I thought the four-year cycle was dead. I declared it over last year. I was wrong.

Bitcoin began to shift in the 4-year cycle when the price exceeded $100,000, reinforcing this narrative last year. Many veteran Bitcoin investors (OGs) holding tens of thousands of BTC have started to sell continuously, realizing all the assets they have accumulated over the years.

From these actions, Lavish stated that Bitcoin is the only reasonable escape as US public debt soars to new heights, predicting BTC will reach a new peak in 2026.

Why liquidity always wins

As the money supply increases, the prices of everything rise, including gold, silver, Bitcoin, stocks, bonds, and real estate.

Conversely, Lavish notes that concerns about war, quantum computing, and artificial intelligence (AI) could cause the market to decline in the short term.

Lavish indicated that this phase is similar to March and April 2020, extending into 2021 and 2022, when the market recovered after rounds of quantitative easing. Therefore, liquidity is always the ultimate deciding factor.

This could repeat as the Federal Reserve (Fed) injects billions of USD into the money supply by buying long-term Treasury bills from banks.

At this point, Lavish notes that the Fed has no choice but to print more dollars to manage the debt that has doubled over the past 10 years to about $39 trillion. The US needs to pay off $12 trillion in debt this year.

Therefore, they need to ensure more US dollars are entering the system. Authorities deliberately keep the dollar weak to facilitate funding.

On this matter, Lavish commented:

The $39 trillion debt of the US is not a problem to be solved. It is a system that needs to be maintained. There will be more refinancing rounds. More liquidity. A deliberately weaker dollar.

Will BTC reach a new high?

Lavish notes that this Bitcoin cycle is slightly different from previous ones, where corrections typically ranged from 70% to 90%. This time, the correction is only about 50%, down to around $65,000 from a peak of $126,000.

Charts show that price action has reached higher levels since the potential bottom began forming in February.

There is an expectation that prices will trade up to $84,000 before another significant correction. Breaking this level will bring the $96,000 target into focus.

Bitcoin BTCSource: BTC/USD on TradingView

Kyle Chase notes that the possibility of a correction to $65,000 cannot be ruled out. This analyst suggests that if BTC does indeed fall to that range, traders will leverage up before BTC heads to a new peak.

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