A reference cycle occurs when two or more instances have strong references to each other, creating a loop that prevents them from being deallocated. For example, if a class A has a property that holds a strong reference to an instance of class B, and class B has a property that holds a strong reference to the same instance of class A, then neither instance can be freed by ARC. To avoid this, you can use weak or unowned references for one or both of the properties, depending on the relationship between the classes. Another common source of reference cycles is closures, which are blocks of code that can capture values from their surrounding context. If a closure captures a strong reference to an instance that also has a strong reference to the closure, then a reference cycle is created. To prevent this, you can use a closure capture list, which specifies whether the closure should capture a weak or an unowned reference to the instance.