Authored by: Liu Jiao Lian
1. A Phenomenon That Confuses Experienced Investors
Bitcoin halving is the most classic story in the cryptocurrency world.
Once every four years, miner rewards are halved, and the supply of new coins decreases. Past experiences show that after halving, a dramatic bull market ensues.
In 2012, after halving, it increased over 90 times. In 2016, it increased nearly 30 times. In 2020, it increased over 7 times.
Then comes the halving in April 2024.
From about $63,000 at the time of halving to a peak of $125,000 in October 2025, the increase is only 97%. Not even double.
Alex Thorn, head of research at Galaxy Digital, made a strong statement: the fourth cycle is dramatically weaker than before.
Upon seeing this, Jiao Lian's first reaction was: Is the old script of halving no longer effective?
2. It's Not Just the Increase That Has Become Smaller
If you look closely, the change is not just in the increase.
Volatility has also decreased. In April 2020, Bitcoin's 30-day volatility surged to 9.64%. In this round, this number has never exceeded 3.11%. According to Bitbo's data, it is currently only about 1.75%.
The declines are also not as deep. Previously, bear markets easily saw declines of 80% or 90%. In this round, from $125,000 to $60,000, the decline is just over half.
Zack Wainwright, a research analyst at Fidelity Digital Assets, also noticed this change. He said that since institutional funds came in, the market has indeed stabilized compared to before.
Stability is good, but it also means that the previous method of blindly buying and waiting for a doubling might no longer work.
3. What is Different This Time
Many attribute the smaller increase and lower volatility to the halving itself becoming ineffective. Jiao Lian believes it may not be that simple.
The most direct reason is that this round had already seen a price increase before the halving.
In January 2024, the first batch of spot Bitcoin ETFs was approved in the U.S. This news pushed Bitcoin from over $40,000 to over $70,000 in March, setting a new historical high at the time.
And the halving occurs in April. Thus, even before the halving, the good news had already been mostly priced in.
This is the first time in history that a new high was reached before halving. In previous rounds, it took a long time after halving to reach new highs.
So, if you take the price of $42,000 before the ETF approval in January 2024 and calculate to the peak of $125,000, the increase is about 197%. While it still does not compare to 761% in 2020, at least it looks better than 97%.
But no matter how the statistical caliber is adjusted, the overall trend of decreasing increases cannot be changed.
4. A Deeper Question
At this point, Jiao Lian wants to ask a deeper question:
If the increases are gradually decreasing and the decreases are also narrowing, is the cyclical pattern of Bitcoin still valid? If it is still valid, in what form will it present itself?
There is a model that Jiao Lian has mentioned many times—the power law model.
This model suggests that the price of Bitcoin does not grow exponentially but rather polynomially. What does that mean? Exponential growth is 1, 2, 4, 8, 16, with doubling happening increasingly quickly. Polynomial growth is also 1, 2, 4, 8, 16, but every time it doubles, the time required grows longer.
Specifically for Bitcoin, the price roughly follows the 5.7 power of time. The lower bound is the bottom of this channel, and historically, every bear market bottom has touched or even briefly dipped below it.
In 2015, 2018, and 2022, three bear markets, all three confirmed this.
Thus, many people have formed a belief: the lower bound is an iron bottom, and when it reaches that point, it can be bought at the bottom.
5. A Warning from the Maginot Line
But Jiao Lian recalls a piece of history.
Before 2022, there was a similar belief in an iron bottom. At that time, everyone said: the bottom of Bitcoin's bear market has never fallen below the historical high of the previous cycle. $20,000 was an iron bottom, as solid as a fortress.
What happened? In June 2022, Bitcoin fell below $18,000. The iron bottom was breached, and the belief collapsed.
The Maginot Line is the same story. The French built a fortified line, and the German army bypassed it through the Ardennes, encircling without firing a shot.
What Jiao Lian wants to say is: when everyone believes that a certain line is solid as a fortress, it is often the most vulnerable.
Will the power law lower bound repeat history? The year 2026 may be the year the answer is revealed.
6. The Time Window of 2026
The power law lower bound is not static; it rises every day.
Calculating based on its upward trajectory: in February 2026, the lower bound will be about $52,000; in April 2026 (now), the lower bound will be about $56,000; by the end of October 2026, it will rise to about $65,000; by the end of December 2026, it will reach about $70,000.
The critical window is in the fourth quarter of 2026.
If by then the price drops to around $65,000, that would be textbook bear market bottoming—touching the power law lower bound, and the historical pattern remains valid.
If the price drops below $60,000, it will be a break below the lower bound, and the model will fail for the first time.
CryptoQuant analysts predict the iron bottom is between $55,000-$60,000. This number happens to be below the lower bound after breaking it.
7. Touching vs Breaking, Significantly Different Meanings
Touching the lower bound and breaking below it are two different matters.
Touching the lower bound (around $65,000) has happened in every bear market bottom historically. The model allows for brief breaks, but the key is whether it can recover. If it only touches and then rebounds, the power law model remains valid.
Breaking below the lower bound (below $60,000), on the other hand, would mark the first time that the price surpassed the model's lower limit. If the closing price stays below the lower bound for several weeks, the model will be considered invalid. This would mean that Bitcoin's growth pattern might have changed—from polynomial to another type of function?
Giovanni Santostasi, the proponent of the power law model, emphasizes that the model should be falsifiable. If the price breaks below the lower bound and stays there for a period, the model should be rejected.
This is not the end of the world; it is scientific progress.
8. Has the Era of 80% Deep Bear Markets Passed?
Returning to the original topic of halving.
To achieve an 80% decline, the price would need to drop from $125,000 to $25,000. That would far exceed the power law lower bound, break below the 200-week moving average, and breach all historical support levels.
From the predictions of most institutions and models, the most pessimistic forecast is only around $40,000-$50,000. Almost no serious analysis points to $25,000.
Is it likely that the era of 80% deep bear markets has mostly passed?
In the fourth quarter of 2026, if the price drops to $65,000 touching the lower bound, that is a textbook bear market bottom. If it drops below $60,000 for a brief breach, that marks the twilight of the power law model, but not the end of Bitcoin.
60% may be the limit for future bear markets. This is both the price of asset maturity and a marker of asset maturity.
9. Jiao Lian's Viewpoints
First, halving has not failed; its role has changed. Previously, halving was the main engine of bull markets; it has now become one of many factors. Macroeconomic interest rates, ETF fund flows, institutional allocation needs—these factors are becoming increasingly significant.
Second, the power law lower bound is not the Maginot Line. It may be breached, or it may not. But do not bet on it as an iron bottom.
Third, the history of breaking below the previous high of $20,000 in 2022 teaches us: all solid fortifications are breached at the most unexpected times.
Fourth, models are tools, not faith. Jiao Lian will reference the power law but will not follow it blindly. Ultimately, the decision is based on individual comprehensive judgments on fundamentals, liquidity, and the macro environment.
Fifth, regardless of whether it breaks below the lower bound, the era of 80% deep bear markets may have already ended. Bitcoin is transitioning from a casino to an asset. Although it lacks some excitement, it gains more solidity.
Let's look forward to the fourth quarter of 2026.
References:
[2] Bitbo, "Bitcoin Volatility Index", accessed Apr 20, 2026.
[3] Fidelity Digital Assets, research note on Bitcoin drawdowns and institutional impact, 2026.
[4] Giovanni Santostasi, "The Bitcoin Power Law", various analyses, 2020-2026.
[5] CryptoQuant, 2026 year-end Bitcoin bottom forecast.
[6] Jurrien Timmer, Fidelity Investments, research notes on Bitcoin key levels.
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