Analysts See Bitcoin Pullback as Temporary Shakeout Not End of Bull Cycle

Despite recent market turbulence and ongoing debates about Bitcoin’s long-term viability, the cryptocurrency remains at the center of financial and technological discussions. While some investors worry that Bitcoin’s latest price correction signals the end of its historic bull cycle, analysts argue that such pullbacks are a natural part of its four-year cycle. At the same time, prominent investor Jason Calacanis has reignited the debate over Bitcoin’s future, suggesting that it will eventually be replaced by a superior alternative—an idea strongly contested by industry leaders who see Bitcoin as a foundational technology rather than a passing trend. 

Bitcoin’s Bull Cycle Remains Intact Despite Market Shakeout and Investor Concerns

Bitcoin’s historic bull cycle remains in play despite a sharp downturn in price, which analysts suggest is a temporary shakeout rather than the start of a prolonged bear market. While the leading cryptocurrency has faced a 22% drop from its all-time high, historical patterns and key market factors point to continued bullish momentum.

Bitcoin’s price has retreated from its record high of over $109,000, reached on Jan. 20, the day of US President Donald Trump’s inauguration. Currently, BTC hovers around $83,279, marking a substantial correction that has triggered investor fears. Market sentiment has swung into “Extreme Fear” multiple times, raising concerns that Bitcoin’s bull market could be losing steam.

However, analysts argue that such corrections are a natural part of Bitcoin’s long-term price cycles. Historical data suggests that pullbacks within a bull cycle are common, often serving as shakeouts—where weaker hands exit the market before a subsequent rally.

“Several key technical indicators have turned bearish, leading to speculation that the bull cycle may be ending prematurely,” Bitfinex analysts said recently. Despite this, they emphasized that Bitcoin’s four-year cycle remains a crucial factor influencing price movements.

”Corrections within bull cycles are normal, and past trends suggest that this may be a shakeout rather than the start of a prolonged bear market,” the analysts explained.

Bitfinex analysts pointed out that institutional inflows could be reshaping Bitcoin’s price dynamics, suggesting that the conventional four-year cycle may no longer be as predictive as it once was.

While Bitcoin has suffered a pullback, positive signals continue to emerge. BTC staged a daily close above $84,000 on March 15, marking its highest daily close since March 8. This suggests that, despite short-term volatility, buyers remain active at key price levels.

Despite Bitcoin’s independent market cycles, analysts caution that its correlation with traditional financial markets remains an important factor. Bitcoin’s price movements often mirror trends in equity markets, particularly the S&P 500. This means that broader economic conditions, including treasury yields and macroeconomic policies, could influence the next major move for BTC.

According to Bitfinex analysts, Bitcoin may only establish a definitive bottom if the broader equity markets stabilize.

Another factor to watch is global economic conditions, including trade tensions and potential financial instability. While trade wars and geopolitical risks have already been priced into markets to some extent, prolonged economic strain could weigh on investor sentiment and slow Bitcoin’s recovery.

Bitcoin’s Four-Year Cycle and Halving Remain Key Drivers

While institutional inflows are changing Bitcoin’s market structure, its traditional four-year cycle and halving events remain critical to long-term price movements.

Nexo digital asset analyst Iliya Kalchev highlighted that Bitcoin’s four-year compound annual growth rate (CAGR) has declined to a record low of 8%, sparking debates over the relevance of its historical price cycles. However, he emphasized that halving events still play a crucial role.

”Although strong institutional adoption over the past year has served as a significant tailwind for Bitcoin, its halving events are still expected to exert long-term influence,” Kalchev said in an interview.

The most recent Bitcoin halving, which took place on April 20, 2024, reduced the Bitcoin network’s block reward to 3.125 BTC per block. Historically, Bitcoin halvings have preceded major price rallies due to the reduction in new BTC supply entering circulation.

Since the halving, Bitcoin’s price has risen over 31%, supporting the argument that supply-side economics still play a major role in determining its trajectory.

Despite investor concerns, Bitcoin’s long-term bull cycle remains intact. Market shakeouts are not uncommon in bull runs, and historical data suggests that BTC could resume its upward trend once weak hands have been flushed out.

As Bitcoin navigates this correction, traders will be closely watching key support levels and market signals to determine whether this is just another shakeout—or the beginning of a deeper pullback.

Bitcoin Community Rejects Investor’s Claim That Bitcoin Will Be Replaced

In other BTC news, Bitcoin’s dominance as the world’s foremost cryptocurrency has once again come under scrutiny, this time from a well-known technology investor who previously backed Uber. Jason Calacanis, an early-stage investor in major tech startups, stirred controversy by suggesting that Bitcoin’s time is coming to an end and that it will inevitably be replaced by a superior alternative.

Calacanis, who has a history of investing in Bitcoin-related firms like Robinhood and Keza, sparked outrage among Bitcoin proponents after his March 14 post on X, where he claimed that Bitcoin’s market position is ripe for disruption.

“Bitcoin has been a wonderful game, but with a couple of giant players cornering the market, the timing is right to ‘build a better Bitcoin’—restarting the game,” Calacanis told his 981,600 followers.

His comments immediately drew sharp criticism from Bitcoin advocates, industry leaders, and developers, who pushed back against the idea that Bitcoin could be replaced.

While Calacanis believes that “all technology gets replaced over time,” Bitcoin supporters argue that the cryptocurrency operates under a different paradigm than traditional tech products.

Brady Swenson, co-founder of Swan Bitcoin, dismissed Calacanis’ remarks, emphasizing that dominant protocols don’t simply get replaced.

“Winning protocols don’t get replaced; they are built upon,” Swenson argued.

Swan Bitcoin’s other co-founder, Cory Klippsten, also rejected the comparison, stating that Bitcoin is not like a consumer tech product, such as an iPad, that follows an adoption curve and eventually becomes obsolete. Instead, he described Bitcoin as a technological revolution that fundamentally alters industries.

David Marcus, CEO of Bitcoin-focused payments company Lightspark, echoed the sentiment, arguing that trying to build a “better Bitcoin” is futile.

While Bitcoin’s base layer remains largely unchanged to preserve its security and decentralization, industry leaders have long argued that innovations can and should occur on second-layer protocols.

Bitcoin layer-2 networks, such as the Lightning Network and Stacks, have gained traction as a way to scale Bitcoin’s capabilities without altering the base layer. These solutions enable faster transactions, lower fees, and even smart contract functionality—features that some competitors, like Ethereum, offer natively.

Despite their growing adoption, Stacks co-founder Muneeb Ali recently suggested that many existing Bitcoin layer-2 projects won’t survive in the long run.

However, Bitcoin advocate Wayne Vaughan believes that Bitcoin’s size and network effect make it increasingly difficult for any new technology to replace it.

“I think of Bitcoin as a network. The larger the network gets, the less likely it is for something else to replace it,” Vaughan said in a March 15 post on X.

Bitcoin’s Longevity: A Network, Not Just an Asset

One of the strongest arguments against Bitcoin’s eventual replacement is its robust network effect. Unlike traditional technologies that rely on innovation cycles to remain relevant, Bitcoin’s core value proposition—decentralization, security, and scarcity—remains unchanged over time.

He acknowledged that speculation in altcoins may lead to occasional “alt seasons,” where alternative cryptocurrencies gain temporary popularity. However, he warned that most investors who chase new projects end up losing Bitcoin rather than gaining wealth.

This is not the first time Jason Calacanis has made bold claims about Bitcoin and the broader crypto industry. In June 2020, he criticized many crypto projects, alleging that they were largely controlled by “unqualified idiots” and “grifters” with below-average skills.

His latest remarks have only intensified his reputation as a crypto skeptic, particularly within the Bitcoin community.