The current Bitcoin cycle is now 75% into the next halving. This is what previous cycles looked like at similar stages of their timeline.
The current bitcoin halving cycle has reached the 75% milestone
The “halving” refers to a periodic event where cryptocurrency block rewards are permanently halved. The “block rewards” are what miners receive as compensation for mining blocks on the network.
The BTC these chain validators receive in these rewards is the only way to introduce fresh coins into the asset’s circulating supply, meaning the block rewards can be viewed as the equivalent of BTC “production”.
The reason the halving exists as a concept is to limit the supply of cryptocurrency and make it scarcer over time as fewer and fewer coins are produced with each halving.
Because the halving has such far-reaching implications for the asset’s supply-demand dynamics, such an event has impacted the cryptocurrency’s price in the past. More specifically, the value of BTC has been witnessing an upward trend as supply is tightened afterwards.
Halvings occur every 210,000 blocks, or roughly every four years. Because of this periodicity and their important place in the market, these events serve as a popular way to define the start and end points of a BTC “cycle.”
An analyst on Twitter has put together a chart showing the status of the current Bitcoin cycle as well as how it compares to previous ones at similar stages.
The different halving cycles of the original cryptocurrency | Source: Santiment on Twitter
As you can see in the chart above, Bitcoin bull runs have historically taken place after halving events, showing how powerful the narrative was around them.
From the chart, it can be seen that the last BTC halving cycle is currently about 75% complete, which means that miners have mined about 157,500 blocks so far this cycle.
While the trends followed by the last two cycles after hitting similar milestones differed between the two, they continued to observe bullish momentum for at least some time after this point.
In the case of the 2012 cycle, the price of the asset continued to rise past the 75% mark and build up into the next bull run. The 2016 cycle reached this milestone while price was in the midst of the April 2019 rally.
The price continued to climb for a while after hitting the mark, but eventually the rally peaked and the cryptocurrency declined thereafter. The proper build up of the bull run did not take place until the 2020 halving (by which time a new cycle had begun).
The April 2019 rally shares many similarities with the current one in terms of various on-chain indicators, so it is interesting that their placement on the respective cycles’ timelines is also quite similar.
It now remains to be seen where the current rally leads from here and whether the pattern of bullish momentum following the 75% halving milestone will continue into this cycle.
BTC price
At the time of writing, Bitcoin is trading around $29,100, up 1% over the past week.
BTC is up sharply today | Source: BTCUSD on TradingView
Featured image by Dmitry Demidko on Unsplash.com, Charts by TradingView.com, Santiment.net
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.