Why the four seasons of crypto matter to investors

Cryptocurrency continues to dominate headlines, but after a powerful run to new highs, bitcoin’s recent retreat is reviving familiar questions for investors: When a sharp pullback begins, how deep can the downturn go—and what signs typically suggest the market is nearing a trough? While past isn’t necessarily prologue in financial markets, investors may want to search for insights from past cryptocurrency trading cycles to understand what may potentially lie ahead.

Bitcoin is one of the leading cryptocurrencies and in many ways acts as a proxy for the overall crypto market. One unique thing about bitcoin is that it is designed to go through a process called “halving.” This means that every four years, the number of bitcoins created every 10 minutes is cut in half. The quadrennial halving most recently occurred in April 2024 and will continue until there is a total of 21 million bitcoins in existence. This process was designed to create scarcity so bitcoins maintain their value.

By intentionally limiting the supply of bitcoin, halving can affect the price of bitcoin to spur a bull run. There have been four halvings since bitcoin’s inception in 2009, and each has kicked off a bull run that spanned anywhere from 12 to 18 months.

The cryptocurrency cycle can be thought of as having four “seasons”:

• Summer: Historically, most of bitcoin’s gains come directly after the halving. This “summer” period starts with the halving event and ends once the price of bitcoin hits its prior peak. Historically, this period has lasted about five months, on average.
• Fall: Once the price surpasses the old high, it tends to attract interest from the media, new investors, and businesses, which can then drive prices even higher. The “fall” represents the time between when the old high is passed and a new high is reached, which signals that the bull market has run its course.
• Winter: Crypto “winter” is likely here after bitcoin fell from its recent peak on Oct 6^th 2025. The inevitable bear market comes when investors decide to lock in their gains, causing prices to drop while scaring off new investment. This “winter” period takes place between when the new high is reached and when the price of bitcoin hits its next bottom. There have been four full crypto winters since 2011, each lasting about 13 months, with sharp declines similar in magnitude to that of US equities during the Great Depression.
• Spring: The crypto market tends to recover from its lows in anticipation of the coming summer period as investors try to get in before prices spike with the next bull market. This “spring” period of historical price momentum occurs between the latest bottom and the next halving event, starting the cycle anew. On average, it spans 17 months.

Strategies that investors may consider to help manage risk and stay disciplined during crypto bear markets include:

1) Hold On for Dear Life (HODL)

“HODL” (short for “hold on for dear life”) is a long-term approach that focuses on staying invested in your crypto holdings through volatility, rather than trying to trade short-term moves. The term originated from an online post that misspelled “HOLD” as “HODL” and became shorthand for patience and conviction. Though it can be hard to stick with when prices swing sharply, HODL may be attractive to investors who view crypto as a long-term holding by helping them avoid the pitfalls of panic-selling or timing the market.

2) Shift exposure to more defensive crypto sectors

During a crypto downturn, investors may consider shifting from higher-volatility tokens toward more “defensive” areas of crypto. This can include adding exposure in stablecoins, focusing on less risky, infrastructure-oriented investments like tokenization platforms, or using strategies designed to monetize volatility by generating income while markets remain choppy. The goal isn’t to eliminate risk, but to potentially reduce portfolio swings and stay engaged in the asset class while waiting for conditions to improve.

3) Reduce crypto allocations

Another straightforward approach is to simply own less crypto. Trimming positions can lower portfolio volatility and help you stay within your comfort zone during downturns. You can do this by setting a maximum crypto percentage for your portfolio, gradually reducing exposure over time, or rebalancing back to your target allocation after big market moves.

Just as a farmer often waits until spring to plant seedlings, crypto investors may want to know when crypto “spring” has arrived to help maximize their potential investment growing season. Crypto winters don’t last forever, so when the market starts to thaw, what signals might suggest a crypto spring is beginning? Here are signs to watch:

• Cycle length: Historically, bitcoin has tended to bottom roughly 12–14 months after the prior peak. Investors also watch the broader four-year halving cycle: In the past, spring has tended to begin about 18 months before the next halving, which in this cycle is expected around March 2028.
• Bitcoin drawdown: In prior cycles, crypto winters have resulted in roughly 80% peak-to-trough declines in the price of bitcoin. In late February 2026, bitcoin was down about 50% from its October 2025 peak, suggesting potential further downside ahead.
• Miner capitulation: Near bitcoin troughs, many crypto “miners” may shut down because they are losing money. As weaker miners exit, mining becomes easier for those remaining. Around this time, a related metric known as “bitcoin difficulty” typically hits a trough, which can be a signal for investors that crypto winter is ending.
• Bitcoin price-to-thermocap multiple: “Thermocap” estimates how much money has been invested in bitcoin over time. A lower price-to-thermocap multiple has historically been associated with bitcoin price troughs, while a higher multiple is more consistent with peaks.
• Exchange problems: Crypto market lows often coincide with exchange crises—hacks, sudden collapses, or solvency scares, plus regulatory actions against major platforms—shaking confidence and pressuring prices.
• Price action: A common confirmation signal is a roughly 50% upside from the low, suggesting buyers are back. That said, history includes cases where a strong rebound was followed by a retest of the lows, so investors often look for higher lows and sustained recoveries rather than a single bounce.

While no one can tell you the right time to buy or sell cryptocurrency, today is the right time to learn more about the crypto market’s cyclical tendencies so that you can ask questions, monitor trends, and determine for yourself whether to invest.

One key thing to keep in mind: As with any investment, past performance doesn’t indicate future results. Potential risks such as encryption breaking, software bugs, recession, or coordinated government action could emerge before the halving and disrupt the cycle.   

CRC# 5304488 03/2026