bitcoin remains under pressure at the time of writing and is within a bearish formation following heavy losses on March 19. As prices sink, an X analyst think This pullback aligns with historical performance, especially as the network prepares to cut miner rewards in April 2024.
bitcoin Pullback Similar to Pre-2020 Halving Cooldown
According to the analyst assessment, btc is currently down about 18% from its recent high. This pullback is on par with the approximate 19% drop seen before the previous halving event in 2020.
It is worth noting that bitcoin has historically corrected lower after recording new highs before halving. The currency subsequently hits new all-time highs after being halved, driven by a decrease in supply. In this cycle, btc soared to a new all-time high of $73,800 in the first two weeks of March before cooling to the spot rate, a departure from the usual trend.
As the bitcoin network prepares for the halving event in mid-April 2024, it is crucial to consider the potential implications for the market. Some market observers speculate that the current decline could offer entries to investors looking to accumulate at a lower price in anticipation of future price gains.
From the candle arrangement of bitcoin on the daily chart, the path of least resistance appears towards the south. Specifically, after the drop on March 19, the coin remains in a bearish breakout pattern, encountering strong rejections from the middle Bollinger Band (BB) or the 20-day moving average. The BB is a technical indicator to measure volatility.
Will the Federal Reserve revive demand for btc?
Currently, bitcoin remains stable. Still, only time will tell if prices will recover, surpassing the $70,000 level in the days leading up to the halving event in less than a month. Fresh spot rate losses mean the decline before the halving and after the pre-halving rally was much steeper than in 2020.
As history clearly shows, the halving is a major event in bitcoin. It has repeatedly proven to be a major price catalyst for bitcoin, as seen in the last bull cycle when prices rose to around $70,000.
Consequently, the next few days will determine the evolution of bitcoin prices in the medium and long term. A key driver of cryptocurrency and btc valuation will be fundamental events, especially pronouncements from the US Federal Reserve (Fed). The central bank will announce its interest rate decision on March 20. In early 2022, when interest rates rose, prices plummeted.
Featured image of DALLE, TradingView chart
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