Anticipation Builds for Bitcoin Halving 2024: Historic Trends Suggest Parabolic Price Surge
Summary:
Leading figures in the cryptocurrency community are focusing on the upcoming Bitcoin halving set for April 2024, which will cut mining rewards from 6.25 to 3.125 BTC. Historically, halvings drive up BTC prices due to supply-demand dynamics, with the last cycle seeing a rise from under $10,000 to over $69,000. A 'Buy the Hype, Sell the News' strategy often results in a pre-halving rally and subsequent price dip. This pattern is followed by a prolonged accumulation phase and a parabolic surge to new highs.
Prominent members of the cryptocurrency community are shifting their attention to the upcoming Bitcoin halving, a recurring event that happens every four years and slashes Bitcoin's circulating supply by half. The forthcoming halving is planned for April 2024, and it will reduce the Bitcoin mining reward from the present 6.25 BTC to 3.125 BTC. Binance's CEO, Chang Peng Zhao, used his X (previously Twitter) platform to start a countdown for the next halving, reminding his followers that it's only 135 days away.
The Bitcoin halving has historically set off a surge in BTC prices, driven by supply-demand dynamics as the supply shrinks while demand grows, pushing BTC to record new highs around the halving date. In the previous bull cycle that began in 2020, BTC was trading below $10,000 nearly two months prior to the May 2020 halving. The bull run leading up to the halving pushed BTC past its previous record high of about $17,000. After the halving event, BTC underwent a parabolic surge, reaching a new all-time high of over $69,000.
In a tweet, technical analysts called 'Rekt Capital' described the BTC bull cycle's different stages, dividing it into phases before and after the halving. They noted that a rally usually begins about 60 days before the halving as investors aggressively buy in anticipation and then sell after the news hits. This often leads to a price hike prior to the halving, followed by a downturn around the halving itself. In 2016, the retrace before the halving was -38%, while the 2020 retrace was -20%.
The retracement is followed by a several-month period of re-accumulation, during which the BTC price climbs gradually. This stage often sees investors exit due to impatience or dissatisfaction with their slow-growing BTC investments. The re-accumulation period is followed by a parabolic surge, with Bitcoin breaking out and hitting new highs. This stage has witnessed Bitcoin's accelerated growth to all-time highs.
Published At
11/20/2023 12:37:14 PM
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