The recent recovery in the cryptocurrency market has reignited discussions regarding Bitcoin's four-year cycle. Ben Nadarewski, CEO of Solstice, linked the diminished volatility typically seen with boom and bust cycles to an increase in market liquidity and institutional involvement, according to Cointelegraph.
In recent weeks, several indicators have shown improvement. One notable metric is the supply of stablecoins, which is a measure of available dollar capital within the crypto ecosystem. As reported by DefiLlama, the total market capitalization of stablecoins has reached $306.7 billion, experiencing a rise of 0.47% over the past week and 1.23% over the past month.
Total market capitalization of stablecoins. Source: DefiLlama.In early September, a report from The Block Research in collaboration with Socure noted that the supply of stablecoins remained relatively unchanged even during Bitcoin's more than 50% drop from its peak. This contrasted with the bearish market of 2022-2023, where the supply of stablecoins decreased alongside trading activity.
The authors attributed this change to the expanding use cases for stablecoins, which now extend beyond cryptocurrency trading to include payments, remittances, tokenized assets (RWA), and various financial services.
The growth of stablecoins has not been uniform across networks. As of the time of writing, Solana's stablecoin supply stands at approximately $16.87 billion, with a 30-day increase of 7.35% and a weekly increase of 4.97%.
Source: DefiLlama.This growth rate is notably faster than the overall market trend. However, increases in a specific network could represent not just new capital entering but also shifts of capital between blockchains.
Capital Movement Grows More Active
Another sign of changing market conditions is the increased utilization of existing liquidity. According to DefiLlama, trading volume on decentralized exchanges (DEX) rose by 3.73% in the past week, with a total turnover of $265.1 billion over the last 30 days.
Source: DefiLlama.Experts from Wintermute assessed that at a recent low, the total inflow through existing channels, including ETFs and stablecoins, dropped to just 2.4% of the crypto market's capitalization. In recent weeks, this figure has begun to recover but remains significantly below the levels seen in prior bull cycles.
The firm believes that for a new sustainable cycle to form, the market might require an additional source of capital influx, with RWA being one potential candidate.
On September 21, Glassnode also noted a shift in Bitcoin buyers' behavior. The flow of market orders on centralized exchanges transitioned from net selling to buying, and spot trading volumes increased.
Bitcoin touches $86k, up more than 10% from last Sunday's close.
Spot and perpetual buyers lead while leverage and profit-taking slowly rise with price.
ETF flows are the one reading still pointing the other way.https://t.co/ITbwts4aLz pic.twitter.com/Gqx3bPgJDZ
— glassnode (@glassnode) September 21, 2026
The monthly change in realized capitalization exceeded the upper limit of Glassnode's statistical range, which analysts interpret as a sign of capital inflow at higher prices.
The proportion of the most active, price-sensitive capital has also approached the upper limit of its range.
Status of on-chain Bitcoin indicators: capital flows are increasing, and profit metrics remain high. Source: Glassnode.The data indicates a shift in the demand structure for Bitcoin, but it does not confirm the onset of a broad bullish phase. For that to occur, growth needs to extend beyond a single asset and be accompanied by a more significant increase in available capital.
Glassnode also highlighted a potential downside of the recovery: alongside increased spot demand, leverage and profit-taking are rising, heightening the market's sensitivity to sudden shifts in sentiment.
The Four-Year Model
The discussion on the growing importance of liquidity raises questions about the continued relevance of explaining crypto cycles predominantly through Bitcoin halvings. Historically, a reduction in miner rewards has preceded a period of growth, followed by a market peak and a lengthy correction.
Danny Galindo, Executive Director of the Global Investment Office at Morgan Stanley Wealth Management, still considers the four-year model a useful guide, as reported by CoinDesk. He noted that the four completed cycles involved approximately three years of growth followed by 12 to 14 months of "crypto winter."
According to his estimates, September is roughly 11 months away from the October peak in 2025 and 17 months before the next halving, aligning closely with periods when recovery phases began in previous cycles.
Other indicators present a less clear picture. During the current correction, Bitcoin has lost about 53% from its peak, whereas previous bear markets saw declines of 77-84%. CoinDesk points out that the Thermocap Multiple, which compares the market cap of the first cryptocurrency to the total value of coins mined, has dropped to around 13. In past cycles, bottoms formed at clearly defined values of this metric.
Galindo emphasized that the historical sample size is limited, and signals may be premature or misleading. He regards these metrics as guidelines rather than predictive tools.
Notably, on September 19, Bitcoin returned to levels above $80,000 following significant short position closures. Within days, the leading cryptocurrency tested $85,000 for the first time since January.