Jan 6, 2026
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Bitcoin’s Current Cycle Lacks Typical Liquidity-Driven Parabolic Surge
Bitcoin's current cycle has presented unexpected developments, challenging typical assumptions about its market behavior.
Key Observations
- Bitcoin's price has steadily climbed over the past two years without the explosive moves associated with a bull phase peak.
- Crypto analyst Sykodelic suggests that this cycle differs structurally from previous ones, not conforming to the usual four-year psychological or technical patterns.
- The disconnect from previous cycles raises questions about whether Bitcoin has peaked or if other factors are influencing its behavior.
Liquidity Trends
- In past cycles, Bitcoin's price peaks aligned with extreme liquidity expansions. However, this cycle shows an inverted structure where liquidity has remained range-bound even as prices rose.
- Bitcoin advanced from $15,000 to over $100,000 despite limited liquidity support—a first in its history.
Future Projections
- Contrary to expectations of exhaustion, Sykodelic believes Bitcoin is bouncing back from a liquidity trough rather than entering a late-stage distribution phase.
- This cycle's demand sources include institutional inflows from spot Bitcoin ETFs and government-level adoption.
- Traditional equity markets have absorbed much of the available liquidity due to the AI-stock boom.
- With quantitative tightening winding down, liquidity conditions are expected to improve, potentially triggering a delayed parabolic surge in Bitcoin prices.
