Bitcoin Update: Price Drops, Fear Rising, and the Four-Year Cycle in Question

By AltIndex Research · 5 min read · November 5, 6:11 am

Bitcoin has had a rocky October, underperforming traditional assets and flashing warning signs in both market sentiment and retail interest. As of this writing, the world’s largest cryptocurrency has stumbled, testing key psychological levels and raising questions about its once-predictable four-year cycle. With sentiment data pointing sharply toward fear, and retail curiosity waning, investors are left wondering: what’s next for Bitcoin?

Recent Performance: Bitcoin Lags Behind

While equity markets and commodities enjoyed modest gains in October, Bitcoin fell behind. The Nasdaq rose 4.8%, the S&P 500 climbed 2.3%, and gold added 3.7% - a reflection of broader market optimism. Bitcoin, however, slipped by 4%, marking a divergence that’s become increasingly noticeable among investors.

Today, Bitcoin is trading at around $102,000, slightly up from recent lows but still reeling from a 10% weekly drop. The pullback brought BTC to its lowest level since June, and it now sits at its weakest 30-day performance relative to the Nasdaq since July 2024. The red start to November, paired with broader market resilience, has created an uneasy sentiment around crypto’s short-term prospects.

Fear and Greed Index Signals Risk Aversion

One of the most concerning developments for crypto investors is the state of sentiment. Our proprietary Fear and Greed Index for Crypto, which among many different alternative data insights, aggregates mood from major crypto forums which shows the market has entered a phase dominated by fear. Yesterday saw the sharpest single-day drop in sentiment this year, plunging 20%. This is a clear signal that traders are stepping back, seeking safety, and hedging risk - classic hallmarks of a fear-driven environment.

Crypto Sentiment in the last 12 months

This index captures the pulse of retail and institutional psychology, often preceding significant moves in the crypto space. When fear dominates, volatility tends to rise and trading volumes often shift away from risk assets like Bitcoin into stablecoins or fiat.

Sentiment isn't just waning on forums. Wikipedia page views for crypto currency wikipedia pages - a surprisingly strong proxy for retail interest - is also slipping. One component of our Fear and Greed Index tracks average daily visits to major cryptocurrency Wikipedia entries. Spikes in pageviews usually occur during bull runs, signaling rising curiosity and retail inflows.

Yesterday marked a notable milestone: for the first time in over a year, average daily pageviews across major crypto articles dropped below 500, falling 10% in a single day. This is a reflection of cooling enthusiasm, fatigue, or a pause in onboarding new retail participants. Bitcoin thrives when it’s part of the cultural conversation. Right now, it’s fading from it.

Heavy Selling Pressure from Long-Term Holders

Another contributing factor to Bitcoin’s underperformance is capitulation among long-term holders. These are wallets that have held BTC for years, often considered “diamond hands” in the community. But as fear grips the market and price action remains tepid, even some of these long-time believers have begun selling off.

This wave of distribution has increased available supply and eroded buying confidence. With buyers hesitant and institutional interest cooled by regulatory uncertainty and macro volatility, Bitcoin has been left to drift lower.

The Four-Year Cycle: Broken or Evolved?

For most of its life, Bitcoin’s price has followed a surprisingly rhythmic four-year cycle tied to its halving events. These halvings - where mining rewards are cut in half - have historically triggered dramatic supply shocks, leading to sharp bull runs followed by extended bear markets. It was, in many investors’ eyes, gospel.

But 2024 shattered the cycle’s predictability. Bitcoin reached new all-time highs before the April halving, driven by massive inflows from newly launched spot crypto ETFs in January. Billions of dollars were absorbed weekly, reducing the halving’s impact.

As a result, many believe the four-year cycle is no longer valid. Bitcoin, once seen as governed by code and scarcity, is increasingly influenced by macroeconomic forces. It’s now behaving like a high-beta tech stock: reactive to inflation data, Federal Reserve decisions, and broader liquidity trends. Bitcoin’s evolution from decentralized money to a mainstream financial asset has tied its fate more closely to Wall Street than to the traditional bull and bear cycle.

What Investors Should Watch Next

Despite the recent downturn, all is not doom and gloom. There are key tailwinds that could support Bitcoin in the coming months:

• Monetary Policy: Central banks are showing signs of leaning toward looser monetary policy again, which typically benefits risk assets like Bitcoin.
• Retirement Access: Discussions around allowing 401(k) and other retirement accounts to include crypto exposure could open a new wave of institutional demand.
• ETF Growth: Spot crypto ETFs are gaining traction, especially among traditional investors looking for regulated exposure.
• Banking Adoption: Tier-1 banks are slowly rolling out crypto services, legitimizing digital assets in the eyes of large clients.
• Regulatory Clarity: The tone from U.S. regulators has improved somewhat, with clearer guidelines and fewer surprise enforcement actions.

The Bottom Line

Bitcoin is currently navigating one of its most uncertain periods in years. It’s underperforming traditional markets, sentiment is falling sharply, retail interest is waning, and the four-year cycle that once guided investor expectations may be obsolete.

But within the fear lies potential opportunity. Long-term investors should keep a close eye on macro signals, regulatory shifts, and whether sentiment indicators - like our fear and greed index - start turning around. Because when they do, history suggests the recovery could be fast and powerful.

Want to stay ahead of the curve with real-time sentiment signals and early trend detection? Join AltIndex to access alternative data insights and receive alerts to stay up to date on Bitcoin and other cryptocurrencies.