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Bitcoin Cycles: Logarithmic Growth and Market Fluctuations – A Look at 2026-2027

Tuesday Dec 2 2025 04:20

2 min

Table of Contents

1. Article Summary
2. Introduction
3. Logarithmic Growth and Price Bubbles
4. Full Log-Periodic Analysis
5. What About the 2021 Bubble?
6. Why This Behavior?
7. Conclusion

Article Summary

Analyzing Bitcoin's price cycles using a logarithmic growth model.
Estimating the timing of a potential price bubble in late 2026 or early 2027.
Studying the impact of institutional investors on Bitcoin cycles.
Explaining why a price bubble did not occur in 2025, contrary to previous expectations.
Clarifying the relationship between Bitcoin's price and its performance compared to gold.

Introduction

Contrary to the popular belief that Bitcoin cycles occur regularly every four years, a deeper analysis suggests that these cycles follow a logarithmic pattern. This means the period between major price bubbles increases over time. Why didn't we see a price bubble in 2025 as some predicted? To answer this question, we must understand that the strength of price bubbles diminishes as Bitcoin ages, and the time intervals between them expand.

Logarithmic Growth and Price Bubbles

The idea of regular four-year cycles is an oversimplification. In reality, Bitcoin cycles follow a logarithmic pattern, with the time between price bubbles increasing over time. This pattern is a result of the fact that Bitcoin itself is an asset with an exponential nature, exhibiting scale invariance over time. To achieve a similar price increase, there must be a proportional growth in time.

Full Log-Periodic Analysis

The full log-periodic algorithm involves using complex algorithms that take into account several factors, including a local power law index and logarithmic time-dependent harmonic terms. Analyses using these algorithms have shown that the fundamental model predicts a major price bubble in around 2027. Some other estimates suggest that this bubble may occur in late 2026.

What About the 2021 Bubble?

The 2021 bubble was not part of the fundamental model, but was the first harmonic of the fundamental model. This means it was a smaller and shorter bubble, but still important.

Why This Behavior?

Bitcoin's price behavior reflects both continuous scaling and discrete scaling. Continuous scaling represents the long-term exponential trend, while discrete scaling represents the intermittent price bubbles. These bubbles occur due to the interest of new market participants when Bitcoin's price exceeds significant levels. Over time, Bitcoin attracts increasing levels of institutional capital, starting with individuals and small businesses and moving to large institutions and sovereign wealth funds. These large inflows of capital lead to significant price increases, creating price bubbles.

Conclusion

Bitcoin's price behavior consists of a long-term exponential trend and intermittent price bubbles. The next major price bubble is expected to occur in late 2026 or early 2027. These cycles reflect the different stages of Bitcoin's adoption by different levels of global capital, from individuals to institutions to sovereign states. As Bitcoin grows, this pattern of exponential growth and price bubbles is likely to continue in the future.

Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients. 

Written by:

Sophia Claire

Bitcoin Cycles: Logarithmic Growth and Market Fluctuations – A Look at 2026-2027

Article Summary

Introduction

Logarithmic Growth and Price Bubbles

Full Log-Periodic Analysis

What About the 2021 Bubble?

Why This Behavior?

Conclusion

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