April 19, 2024
Crypto Enthusiasts Countdown to Bitcoin Halving Milestone
Bitcoin News

Crypto Enthusiasts Countdown to Bitcoin Halving Milestone

The focus of the cryptocurrency community and numerous prominent figures within it has now shifted towards the upcoming Bitcoin halving, an event that occurs every four years and reduces the market supply of new Bitcoin (BTC) in half.

Scheduled for April 2024, the next halving will see the Bitcoin mining reward decrease from the current 6.25 BTC per block to 3.125 BTC per block. Binance CEO Changpeng Zhao used Twitter to initiate a countdown for the approaching halving, reminding everyone that the event is only 135 days away.

The historical association between the Bitcoin halving and bullish momentum for the BTC price is attributed to supply and demand dynamics. The reduction in new supply, coupled with increasing demand, typically propels the BTC price to new highs in the months following the halving.

Leading up to the last halving event in May 2020, the Bitcoin price was trading at under $10,000 two months prior. As the event approached, bullish momentum drove BTC’s price beyond the previous cycle’s all-time high of approximately $17,000. Subsequently, after the halving, the BTC price entered a parabolic surge, reaching an all-time high of almost $69,000.

Renowned trader and analyst Rekt Capital also utilized X (formerly Twitter) to delve into the various phases of a BTC bull cycle. The analyst divided the timeline into pre-halving and post-halving events, emphasizing a pre-halving rally approximately 60 days before the event, driven by investors “Buy the Hype” to “Sell the News.”

Nevertheless, the euphoric surge in prices before the halving is typically followed by a retracement around the actual halving time. In 2016, the pre-halving retracement was 38%, while the pre-halving retracement in 2020 was 20%.

The pre-halving pullback is commonly succeeded by a multi-month reaccumulation phase, during which the BTC price experiences fluctuations and modest gains amid a period of stagnation. Many investors exit during this stage due to boredom, impatience, and disappointment with the immediate post-halving performance of their BTC investments.

Following the accumulation phase, there is typically a parabolic surge wherein Bitcoin breaks out from the reaccumulation area to achieve new highs. Throughout this phase, Bitcoin undergoes accelerated growth on its way to establishing new all-time highs.

Image By Sketchepedia

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