The Bitcoin halving is arguably the most important event in the cryptocurrency industry and occurs every approximately four years (210,000 blocks). The goal is to reduce the rate at which new BTC are produced, essentially reducing pre-programmed inflation rates and ensuring that Bitcoin mining will continue for many more years, even though more than 90% of the total supply has already been mined.
The next event of this kind is scheduled to take place in early April 2024. Given the asset's history of experiencing wild rides before, during and after each of its previous three halvings, crypto analysts have begun speculating about what could happen next year or so.
First phases: pumps and dumps
Whether it's the hype surrounding the upcoming halving or the possible approval of the first spot Bitcoin ETF in the US (or perhaps both), the fact is that the price of BTC has been on the rise in recent months. Just over the weekend, the most important cryptocurrency reached its 19-month high of almost $45,000. A pretty impressive figure considering the asset was valued at around $17,000 at the start of the new year.
Popular crypto analyst Rekt Capital, with the
Based on historical data, Rekt Capital suggested that BTC will witness another rally around 60 days before the halving. This is typically followed by a “pre-halving retracement” that occurs around the event. In 2016, BTC fell by almost 40% and four years later by 20%.
Reaccumulation and parabolic trend
Smart investors are using the aforementioned “pre-halving retracement” to stack sats, but the confidence of others could be very different, Rekt Capital warned:
“Many investors are unsettled at this stage due to boredom, impatience and disappointment at the lack of important results from their BTC investment immediately after the halving.”
Once the dust settles, the halving is history and the reaccumulation phase is complete, comes the sweetest part – the parabolic price rise.
Of course, history is not an indication of future price movements. Nevertheless, BTC actually shot up months after each of the previous halvings, reaching new all-time highs within a year and a half. The last such example occurred at the end of 2021, when it reached $69,000. For reference, the third halving took place in May 2020.
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