Bitcoin Struggles to Break Resistance Level
Bitcoin has experienced a bearish week, with a 3% decrease in its price since the beginning of the week. The cryptocurrency has been unable to surpass the $27,000 mark, indicating a potential risk of further losses in the near future.
Analyst Predicts Price Correction Based on Historical Trends
According to crypto analyst Rekt Capital, the current retracement in Bitcoin’s price could be the start of a historical cycle that occurs before each halving event. The Bitcoin halving, which happens approximately every four years, cuts the block reward for miners in half. Based on data from previous halvings, BTC could potentially drop by up to 38% before the next halving.
In previous cycles, significant pullbacks occurred around six months before each halving. For example, in 2015, BTC retraced 25% 196 days before the 2016 halving. Similarly, in 2019, BTC retraced 38% 196 days before the 2020 halving. With the next halving expected in April 2024, it suggests that the market is now primed for a correction.
Bitcoin’s Price Performance and On-Chain Metrics
Bitcoin is currently trading at around 60% below its all-time high, following a pattern observed during past halvings. Additionally, on-chain transactions on the blockchain are at a three-month low, with 95% of Bitcoin’s circulating supply remaining unchanged in the past month. This indicates that investors are holding onto their BTC while awaiting approval of spot Bitcoin ETFs by the SEC.
Potential Impact of a Correction
If history repeats itself and a correction occurs before the next halving, Bitcoin could experience a significant drop. With the current price at $26,770, a 38% retracement could push BTC below $18,000, which would be detrimental for BTC holders. However, despite the possibility of a correction, Bitcoin’s long-term growth prospects remain strong. Over the past decade, it has consistently shown an upward trend and has been recognized as the best performer in terms of asset investing.
Hot Take: Bitcoin’s Resilience and Positive Outlook
Despite short-term uncertainties, Bitcoin has demonstrated resilience and a positive outlook throughout its history. Reflexivity, a digital asset research firm, named Bitcoin the best performer this year in terms of asset investing. Billionaire hedge fund manager Paul Tudor Jones also believes that now is the opportune time to buy BTC. While a correction may be on the horizon, Bitcoin’s overall trajectory remains promising.
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