Is This Actually the Reason for Bitcoin’s Decline? Not Trump’s Tariffs

The cryptocurrency market experienced a significant sell-off this week, with Bitcoin losing 9%, Ethereum losing 6%, and XRP losing 15%. Some altcoins saw even steeper declines.

Analysts state that this sharp pullback may be due to both geopolitical developments and investors’ expectations of the classic “four-year cycle.”

Last Friday, following US President Donald Trump’s threat of new tariffs on China, the crypto market saw a total of $19 billion in liquidations, marking one of the highest daily liquidation volumes in crypto history. Selling pressure continued throughout the week following this development.

Bitcoin’s past price movements have been associated with cycles following a “halving,” a period in which miner rewards are cut in half every four years. In this pattern, Bitcoin typically peaks in the year following the halving, followed by a sharp decline.

But some experts believe this classic model is losing its validity. “Some investors are still clinging to the four-year cycle,” said Matthew Nay, a research analyst at Messari. “It’s been almost four years since the previous peak, and uncertainty surrounding trade wars is causing them to defend their short positions.”

Stocktwits chief analyst Jonathan Morgan described some of the current selling as “mechanical selling”:

“Many retail investors still trade by the old rule book: Buy before the halving, sell if the price doesn’t bounce.”

Wintermute strategist Jasper De Maere also agreed, saying, “This strategy is now outdated. Miner rewards are a very small share of total trading volume, so halvings don’t have as much of an impact on the price as they once did.”

Some analysts, however, argue that the concept of a four-year cycle is completely gone. Messari’s Nay suggests that Bitcoin could reach an all-time high again before the year is out, while Morgan summarized the transformation as follows:

“The halving model echoed a younger market. Back then, miner rewards determined supply, but now ETFs, institutional funding, and derivatives markets have completely overwhelmed that influence.”

Experts say the crypto market has become so intertwined with traditional finance that the old halving-centric cycle model is losing its meaning with the rise of ETFs, institutional investments, and derivatives trading.

*This is not investment advice.