Has been a fairly bearish week for bitcoin, as the crypto has fallen around 3% since the beginning of the week. The price action, in particular, has seen bitcoin struggle to break above $27,000, indicating a potential risk of further losses below this resistance level in the near term.
However, according to one crypto analyst, this current pullback could be the beginning of a bitcoin historical cycle before each halving.
Analyst shows bitcoin price correction based on historical trends
crypto analyst Rekt Capital has said in a mail That if bitcoin‘s historical “halving cycles” are any indication, a major price correction could be just around the corner. The bitcoin halving halves the block reward for miners.
This happens approximately every 4 years to slow the creation of new btc and control inflation. Based on historical data from the two previous bitcoin halvings, the btc price could fall by up to 38% before the next halving.
In a chart shared on X (formerly Twitter), Rekt Capital showed that a major pullback occurred around six months before each halving. In the 2015 cycle, btc retraced 25% 196 days before the 2016 halving.
In 2019, btc retraced 38%, 196 days before the 2020 halving. So, with the next halving scheduled for April 2024, it would appear that the market is now in prime position for the next correction.
<img decoding="async" class="alignnone size-medium wp-image-555309" src="https://www.newsbtc.com/wp-content/uploads/2023/10/bitcoin-halving.jpeg?w=460&resize=460%2C325″ alt=”Halving bitcoin” width=”460″ height=”325″ srcset=”https://www.newsbtc.com/wp-content/uploads/2023/10/bitcoin-halving.jpeg?w=1788 1788w, https://www.newsbtc.com/wp-content/uploads/2023/10/bitcoin-halving.jpeg?w=460&resize=460%2C325 460w, https://www.newsbtc.com/wp-content/uploads/2023/10/bitcoin-halving.jpeg?w=768 768w, https://www.newsbtc.com/wp-content/uploads/2023/10/bitcoin-halving.jpeg?w=860 860w, https://www.newsbtc.com/wp-content/uploads/2023/10/bitcoin-halving.jpeg?w=1536 1536w, https://www.newsbtc.com/wp-content/uploads/2023/10/bitcoin-halving.jpeg?w=120 120w, https://www.newsbtc.com/wp-content/uploads/2023/10/bitcoin-halving.jpeg?w=750 750w, https://www.newsbtc.com/wp-content/uploads/2023/10/bitcoin-halving.jpeg?w=1140 1140w” sizes=”(max-width: 460px) 100vw, 460px” loading=”lazy” data-recalc-dims=”1″/>
Previous halving trends | Source: X
bitcoin is currently bitcoin-could-explode-beyond-all-time-high-2024/” rel=”nofollow”>60% below its all-time high, following a similar pattern with previous halvings. 200 days before the 2020 halving, btc was 60% below its bitcoin-could-explode-beyond-all-time-high-2024/” rel=”nofollow”>its highest point. Likewise, 200 days before the 2016 halving, btc was 65% below its bitcoin-could-explode-beyond-all-time-high-2024/” rel=”nofollow”>its highest point.
What a correction would mean for btc
bitcoin‘s price direction is currently uncertain, especially as on-chain transactions are now at their lowest level in three months. On-chain metrics have shown that bitcoin-on-chain-transactions-all-time-low/” rel=”nofollow”>95% of bitcoin‘s circulating supply has not changed hands in the last month as investors appear to hold on to the cryptocurrency in anticipation of the SEC’s decision. bitcoin-etf-3-6-months-until-approval/” rel=”nofollow”>bitcoin spot ETF approval.
Although past performance is not always repeated, if this pattern reappears before the next halving, bitcoin could see a major correction. With the current btc price now at $26,770, a 38% retracement could see btc fall below $18,000. If this happens, it would be devastating for btc holders.
Although a price correction may be on the horizon, bitcoin‘s long-term growth prospects remain strong. Over the past decade, bitcoin has shown a steady upward trend as the largest cryptocurrency by market capitalization despite facing several setbacks.
bitcoin has been named the best performer of this year in terms of asset investment by Reflexivity, a digital asset research company. According to billionaire hedge fund manager Paul Tudor Jones, this is the Best time to buy btc.
<img decoding="async" class="aligncenter size-medium" src="https://technicalterrence.com/wp-content/uploads/2023/10/What-to-expect-if-historic-Bitcoin-halving-cycles-repeat" alt="Tradingview.com bitcoin Price Chart” width=”2804″ height=”1746″ loading=”lazy”/>
btc price at $26,782 | Source: BTCUSD on Tradingview.com
Featured image from Asia crypto Today, chart from Tradingview.com
