Historic Patterns Signal Potential Dip in Bitcoin Price Following Upcoming Halving
Summary:
Bitwise Asset Management reports that the month following Bitcoin's anticipated halving on April 20 might show disappointing price trends based on historical patterns. In the past, Bitcoin's price decreased slightly in the month following the halving but surged significantly in the subsequent year. Despite reaching a record high before its halving in the current market cycle, industry experts anticipate a potential short-term market downturn.
The highly awaited Bitcoin (BTC) halving is set for April 20, but according to Bitwise Asset Management, the ensuing month usually exhibits underwhelming price trends. Bitwise's report, released on April 16, has shown that in the wake of the three previous halvings, Bitcoin's price sluggishly declined. However, over the course of the subsequent year, price gains were always in the hundreds of percentages. For instance, post the 2012 halving, Bitcoin gained an insignificant 9% in one month, yet catapulted 8,839% over the following year. A somewhat similar pattern emerged after the 2016 halving — a 10% drop in a month, and then a jump to $20,000 in 2017, boosting gains by 285%. Once more in 2020, Bitcoin rose just 6% after a month post-halving, yet accelerated a whopping 548% in the year after.
According to Bitwise, "While there's little data, an enticing pattern emerges. The market accounts for the halving's immediate effect, but seems to underestimate its long-term implications."
This is the first market cycle where Bitcoin has achieved an all-time high before its halving. On March 13, Bitcoin reached a record high of $73,679, followed by a subsequent 16% decrease to roughly $64,400.
Many industry leaders share this short-term pessimistic outlook. Markus Thielen, 10x Research's research head, predicted on April 13 that a $5 billion miner sell-off post-halving could push the markets downwards. Concurrently, Marathon's CEO Fred Thiel suggested that the expected halving rally has already been calculated in, thereby preempting any post-halving surge.
On the same day, a trader and analyst known as “Rekt Capital” had compiled a list of market correction scales since the 2022 bear market bottom, featuring five significant pullbacks ranging from 18% to 23%. In the current market, a 16% correction was seen indicating the possibility of more to come. Another analyst, "Cold Blooded Shiller," brought to attention that 30% corrections were frequent, implying that BTC could potentially plunge to approximately $51,000.
Published At
4/17/2024 8:58:57 AM
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