bitcoin (btc), the largest cryptocurrency on the market, has seen its price swing between $42,000 and $43,000, halting its recovery since the drop below $38,500.
With the next halving event scheduled for April, market experts and crypto analysts like Rekt Capital are observing historical patterns that suggest an interesting price action scenario, which could trigger another major price increase for bitcoin.
Is the pre-halving rally for bitcoin imminent?
Rekt Capital, known for its expertise in market trend analysis, highlights the importance of historical patterns over previous halving events. These patterns reveal a consistent trend of substantial rallies leading to halvings, followed by a brief period of correction and consolidation before a major bull run and spike.
According According to Rekt Capital, bitcoin should begin its pre-halving rally next week if history indicates so.
This rally, fueled by investors “buying the hype” in anticipation of the halving, aims to capitalize on rising prices and make profits by “selling the news.” Short-term traders and speculators often take advantage of this hype-driven rally and sell their positions.
Subsequent selling pressure contributes to a phenomenon known as pre-halving pullback. This pullback usually occurs a couple of weeks before the actual halving event.
In previous halving cycles, the pre-halving pullback reached depths of -38% in 2016 and -20% in 2020. It is worth noting that this phase can last several weeks, introducing uncertainty among investors on whether the halving will act as a bullish catalyst for the price of bitcoin.
Overall, historical patterns observed by Rekt Capital point to the possibility of a pre-halving rally in the coming weeks, followed by a correction period known as a pre-halving pullback.
While past performance is no guarantee of future results, these historical trends provide valuable guidance on how the price of bitcoin may behave in the coming weeks and days leading up to the halving.
Support for long-term holders and ETF buying pressure
Despite the expected short-term gains for btc, crypto Con recently drew attention to a historic trend in the bitcoin market. According to crypto Con, No bitcoin Cycle Has Ever Escaped a Retest of the Long-Term 150% Holder support line.
According For the analyst, this line has acted as a crucial support level for several market cycles. Even during the unprecedented black swan event and subsequent recovery in 2020, the price retested this line as support.
Analyzing this metric, crypto Con suggests that based on historical patterns, bitcoin price may need approximately $31,300 to retest the long-term fork support line.
The expected impact of ETF buying pressure on the price of bitcoin is counteracting the argument for further corrections. Presenting ETFs (Exchange Traded Funds) in the cryptocurrency market is a relatively new development. As such, the effects of ETF inflows on the price of bitcoin remain to be seen and are the subject of continued observation.
While the possible retest of the support line to long-term holders may create temporary price fluctuations, proponents of bitcoin as an investment opportunity see that scenario as a purchase opportunity.
Ultimately, crypto Con believes that those who believe in bitcoin's long-term prospects may choose to take advantage of any price decline resulting from a retest of support.
btc is trading at $42,800, up slightly by 0.4% over the past 24 hours at the time of writing.
Featured image from Shutterstock, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent NewsBTC's views on whether to buy, sell or hold investments, and investing naturally carries risks. It is recommended that you conduct your own research before making any investment decisions. Use the information provided on this website at your own risk.
