The Bitcoin halving event, which occurs approximately every four years, is a pivotal moment in the lifecycle of the cryptocurrency. This process reduces the rewards miners receive for verifying transactions. It also includes the resulting impact on Bitcoin’s supply dynamics and therefore its price. There’s a way to grasp the nuances of Bitcoin’s halving cycles through the five distinct phases that define this extraordinary event. Analyst Rekt Capital points to these five stages.
5 Phases of The Bitcoin Halving
1. Pre-Halving period
If a deeper retrace is going to occur, it will likely be over the next 140 days or so (orange)
In fact, $BTC retraced -24% in 2015 and -38% in 2019 at this same point in the cycle (i.e. ~200 days before the Halving)… pic.twitter.com/r1dAWBJXyw
— Rekt Capital (@rektcapital) October 6, 2023
Bitcoin pre-halving period: Preparing for the change
Before the actual halb occurs, Bitcoin usually goes through a preparatory phase. During this period, which lasts approximately 140 days, the price of Bitcoin may experience a significant pullback. Historical data says that Bitcoin retreated about 24% in 2015. It also reveals that in 2019, it retreated by 38% at this stage of the cycle. A 30% drop from current prices would see Bitcoin revisited around $20,000.
Rally before halving
A pre-halving rally typically occurs approximately 60 days before the Bitcoin halving event. This rally is fueled by investors “buying the excitement” in anticipation of the upcoming halving. These investors aim to benefit from this excitement. They also often follow the “sell the news” strategy when the halving occurs.
Pre-halving rewatch: A moment of doubt
As the Bitcoin halving event approaches, a pre-halving pullback tends to occur. This phase is marked by a decline in Bitcoin’s price. It also leads some investors to question whether the halving will truly act as a bullish catalyst. In 2016, the pre-halving pullback was 38% deep, while in 2020 it was 20% deep.
Reaccumulation: Patience is key
After the pre-halving pullback, Bitcoin enters a reaccumulation phase of several months. This period can test the patience of investors. Because investors may experience boredom, impatience and disappointment because they cannot immediately achieve significant results in their Bitcoin investments after the halving.
Parabolic bullish phase for Bitcoin: Rising to new highs
The peak of the halving cycle occurs when Bitcoin exits the reaccumulation phase and enters a parabolic uptrend. At this stage, Bitcoin begins its journey towards all-time highs. It also experiences rapid growth.
As Kriptokoin.com, understanding these five stages of the Bitcoin halving cycle provides valuable information to investors. It also allows them to navigate the price fluctuations and dynamics that accompany this important event. On the other hand, BTC continues to develop. Accordingly, each halving cycle contributes to its extraordinary past and future as a pioneering digital asset.
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