Bitcoin’s four-year cycle is under pressure
According to the traditional four-year cycle, Bitcoin should be reaching its low point about now. However, the market seems to have little interest in following the usual script. On the contrary, a growing number of signals point towards a new bull market. US crypto developers are also getting a helping hand from their main regulator. Read more about this in this edition of the Market News.
Market update
September's monthly close offered the Bitcoin market another sign that we may be in the early stages of a new bull market. The price rose 9% from €67,600 to €73,800, and closed well above its 12-month average for the first time since October 2025.
There are also signs of strength beneath the surface. Last month, the RSI momentum indicator rose from below 50 to above 50, and has remained there this month. Three consecutive months of gains also look more like a bull market than a bear market.
The idea that Bitcoin follows a four-year cycle with clockwork precision is coming under serious pressure. The most extreme version of the theory assumes bull markets last exactly 1,064 days and bear markets 364 days. By that calculation, the market should bottom today, October 5th. Even the less rigid version of the four-year cycle is looking shaky. A lot would have to happen for Bitcoin to fall below €50,000 in October. It's not impossible, but it is certainly not the base scenario.
Outside the crypto market, doubt and concerns remain high about the war in Iran, energy prices, inflation, bond yields, and potential bubble formation in AI stocks. If some of that uncertainty eases and confidence returns, it would remove a significant headwind, including for the crypto market.
Featured
SEC: ‘Development is back on’
Imagine you have launched a crypto product with its own token and you're continuing to develop it. For years, one question would have constantly loomed: at what point does your development work turn into something that causes your token to be legally classified as a security?
That distinction matters. If a token falls under securities law, strict rules suddenly apply. Anyone who fails to comply can find themselves in serious trouble.
To answer this question, people often look to the Howey test. One of the factors it considers is whether token buyers expect to profit from the efforts of others. However, there is no simple yes-or-no answer, leaving US developers in a constant state of uncertainty.
Last week, the US market watchdog, the SEC, cleared up some of that uncertainty. The regulator published answers to frequently asked questions from crypto developers. While the guidance doesn’t create any enforceable rights, it does provide a clear indication of how Washington is approaching crypto.
Once a crypto network is up and running, developers are free to keep building on it. Developers can secure, maintain, improve, and expand the network. They can fund new projects and work to attract more users and activity. According to the SEC, these activities are not “essential managerial efforts” that token holders might rely on when expecting to make a profit.
Developers are also free to promote their product. For example, a developer can promote existing applications and talk in general terms about future possibilities. However, the key is not to make a specific promise that the team will build something primarily to increase the value of the tokens held by investors.
Even buying back tokens is not automatically fatal, according to the regulator. In the context of a functioning network, such a buyback can take place without suddenly creating an investment contract between developers and investors. The network must be sufficiently decentralized, however.
This clarity is more than welcome for the US crypto sector. The commission previously introduced exemptions for startup projects, protecting them from overly burdensome rules. Now that a position has also been taken on more mature projects, the message across the entire lifecycle of a crypto project is simple: developers can build again.
In other news
Layer-2 network Blast is shutting down, with withdrawals open until October 26. The project aimed to attract decentralized applications by automatically generating yield on ETH and stablecoins. In June 2024, it still held a total of $2.2 billion in assets yielding this way. Only $65 million of that remains. “We do not see a credible path to profitability for us,” the team wrote. Until the end of October, Blast will continue to facilitate the transfer of funds to other networks. After that, users will need to execute smart contract transactions themselves.
Brussels wants tighter oversight of DeFi gateways. ESMA has proposed expanding MiCA rules for crypto companies that facilitate transactions to decentralized protocols. These companies would become responsible for assessing these protocols, explaining risks to their customers, and identifying conflicts of interest. The regulator also wants additional rules for staking and lending. Fully decentralized software and self-custody remain exempt. The message is clear: commercial access to DeFi must be subject to greater regulatory oversight.
Polymarket challenges Dutch ban in court. In February, the Dutch Gambling Authority (Ksa) ordered the company to cease its activities. The regulator ruled that Polymarket is operating a gambling platform without the required license. The company disagrees, arguing that it offers financial products and should therefore fall under the supervision of the AFM. Polymarket has initiated similar legal challenges in several US states.
US Bitcoin funds post inflows for three consecutive weeks. Last week, $241 million flowed into the funds, with the lion's share coming in on Friday, and BlackRock (IBIT) the largest recipient. Over the past three weeks, investors have poured $2.6 billion into Bitcoin through ETFs. Ether has performed less well over the same period, posting two weeks of losses. Solana funds have the most impressive streak, with 14 consecutive weeks of inflows, although the amounts involved are much smaller.
Satoshi Radio: The latest episode of Satoshi Radio is largely devoted to the Box 3 plan that was presented to the Dutch House of Representatives last week. It contains design flaws that could also affect bitcoin holders. The market update looks ahead: has the bull market truly begun now?
This article is for informational purposes only and does not constitute a marketing communication or recommendation. None of the content herein should be considered as investment advice or a substitute for it. Bitvavo makes no guarantees regarding the accuracy or completeness of the provided information. Investments involve risks. There is a possibility of losing your entire invested capital.