Understanding Bitcoin Halving Cycles
One expert in the crypto market, Rekt Capital, has analyzed the different cycles that occur during Bitcoin halving events. The first cycle is called the Pre-Halving period, which takes place in the last 100 days leading up to the halving. During this time, there may be a buying opportunity as any price decrease could result in significant returns after the halving.
The second cycle is known as the “Pre-Halving rally,” which occurs around 60 days after the halving. Some investors may buy into the hype and then sell their investments before the event, triggering a post-halving retracement.
This leads to the third cycle, the “Pre-Halving retrace,” which historically has seen a significant correction in Bitcoin’s price. In 2016, there was a 38% retracement, while in 2020, it was a 20% retracement.
After this phase, there is a re-accumulation period where little progress is made. However, the final phase called the “Parabolic Uptrend” showcases the true impact of the halving.
The Impact of a Bitcoin ETF
Although Rekt Capital’s analysis is based on past halvings like Litecoin’s in August 2023, the potential approval of a Bitcoin ETF could change things this time. If an ETF is approved soon, it could bring institutional adoption and liquidity into the market, potentially shortening or invalidating certain cycles like the Pre-halving retrace and re-accumulation phase.
Hot Take: What Lies Ahead for Bitcoin?
As we approach the upcoming Bitcoin halving event in about 100 days, it’s important to understand the different cycles that occur during this time. Rekt Capital’s analysis provides insights into the potential buying opportunities, retracements, and eventual uptrend that Bitcoin may experience. However, the impact of a Bitcoin ETF approval could alter these cycles, bringing institutional adoption and liquidity into the market. It will be interesting to see how these factors play out and what lies ahead for Bitcoin in the coming months.
At the time of writing, Bitcoin is priced at $42,834.13, showing a 0.53% increase in the past 24 hours.
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