![[Bitop Review] Bitcoin's Gains This Year Completely Wiped Out! Four-Year Cycle Approaching, People Rushing to Sell BTC](/api/image-proxy?url=https%3A%2F%2Facademy-public.coinmarketcap.com%2Fsrd-optimized-uploads%2F480438d535c9435c88ef3f4d366e5bc2.jpg)
Bitcoin, just over a month after hitting a historical high, has erased its gains of over 30% since the beginning of the year. The recent cooling of AI tech stocks has led to a decline in overall risk appetite, with Bitcoin funds being the first to exit. Additionally, people believe in Bitcoin's four-year cycle and are rushing to sell Bitcoin before the bear market arrives, with the fear-greed index falling back to the extreme fear zone.
Bitcoin's Price Fluctuations and Performance
Since the beginning of this year, Bitcoin's price has fluctuated violently, causing investors great distress. In April, following U.S. President Trump's announcement of additional tariffs, Bitcoin's price once fell to a low of $74,508, then rebounded to a historical high of $126,199, but recently pulled back again, falling below last year's closing price on Sunday, with this year's performance completely wiped out!
Market Risk Aversion and Fund Outflows
The recent cooling of AI tech stocks has led to a decline in overall risk appetite. Matthew Hougan, Chief Investment Officer of Bitwise Asset Management, stated that overall market risk aversion is high, and cryptocurrencies are often the first to signal such shifts in the market.
For the majority of this year, institutional investors have been instrumental in bolstering Bitcoin's legitimacy and price. Data from Bloomberg indicates that ETFs have collectively absorbed over $25 billion in funds, propelling Bitcoin's asset scale to approximately $169 billion at its peak. The consistent inflows from these institutions helped Bitcoin establish itself as a tool for portfolio diversification, serving as a hedge against inflation, currency devaluation, and political instability. However, this narrative, which has proven to be inherently fragile, is now facing renewed challenges, revealing a more subtle yet equally impactful factor: fund outflows.
The Four-Year Cycle and Investor Behavior
Bitwise CEO Hunter Horsley bases his perspective on the observed four-year cycle phenomenon in Bitcoin. The prevailing belief that Bitcoin's price will decline in 2026 prompts some investors to sell in 2025 to preemptively avoid the anticipated downturn. However, Horsley contends that this pattern is characteristic of the cryptocurrency market's previous era. With the introduction of Bitcoin ETFs and a new administration, the market structure has fundamentally changed, ushering in new participants, different dynamics, and novel reasons for buying and selling. Horsley suggests that the market may have already experienced a bear market for nearly six months and is on the verge of emerging from it.
From the standpoint of market sentiment, the fear-greed index has receded into the extreme fear zone. Currently, there are no apparent significant bullish catalysts on the horizon.