Bitcoin Progress Towards Next Halving Has Reached 86%
In a recent post by BTC cycle analyst Root, an update on the progress towards the next halving of Bitcoin was shared. The halving is a regular event on the Bitcoin blockchain where the block rewards are reduced by half.
The block rewards refer to the compensation received by miners for solving blocks on the network. These rewards are crucial as they are the only way to create new Bitcoin, making the rate at which miners solve blocks equivalent to the production rate of the asset.
The purpose of the halving is to gradually decrease this production rate over time. Without it, the Bitcoin supply would continue to grow indefinitely at a constant rate, potentially impacting the asset’s price due to supply and demand dynamics.
By implementing halvings, Bitcoin’s inflation remains controlled, and the asset becomes scarcer with each event, occurring approximately every four years. Many experts use halvings as defining moments for Bitcoin cycles.
Progress Towards Next Halving
A chart shared by Root reveals that Bitcoin is currently around 86% through its current cycle leading up to the next halving event. Comparatively, at this stage in previous cycles, Bitcoin experienced local tops in its price.
In one cycle between the first and second halvings, the price declined after reaching this top but eventually resumed an upward trend. However, during another cycle between halvings 2 and 3, there was a steeper decline and an uptrend was not observed until later in the cycle. It’s worth noting that the COVID-19 pandemic may have influenced this deviation due to a sharp crash in cryptocurrency prices.
As we approach the next halving scheduled for next year, it remains uncertain which path Bitcoin will take. There have been similarities between this year’s rally and the one in April 2019, suggesting that Bitcoin may follow a similar trajectory to the last cycle.
BTC Price
Bitcoin has been hovering just below the $28,000 level recently, but today its price has dipped to around $27,500.
Hot Take: What Lies Ahead for Bitcoin?
Bitcoin’s progress towards the next halving is reaching a critical point. As we observe historical cycles, it becomes evident that local tops in Bitcoin’s price often occur at this stage. However, the response after these tops can vary, with some cycles experiencing a quick recovery and others facing a more prolonged downtrend.
The upcoming halving presents an interesting juncture for Bitcoin. Will it continue to follow patterns from previous cycles or chart its own course? Only time will tell. Keep an eye on market developments and the impact of external factors, such as global events or regulatory changes, as they could influence Bitcoin’s trajectory in unexpected ways.
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