Bitcoin Approaching ‘Danger Zone’ Ahead of Halving, Analyst Warns
A well-known analyst suggests that Bitcoin (BTC) is entering a critical phase in its market cycle, which historically has been accompanied by significant price corrections. According to the analyst, this phase occurs around two to four weeks before the Bitcoin halving, when miners’ BTC rewards are halved. During this period, the flagship cryptocurrency is considered to be in a “danger zone” where it is susceptible to price retracements.
The Pre-Halving Danger Zone
The analyst, known as Rekt Capital, explains in a YouTube video update that there is a specific danger zone leading up to the halving event. This danger zone represents a historical point where Bitcoin has typically reached a local top in its previous rally phase before experiencing a pre-halving retrace.
Rekt Capital notes that the current danger zone is still several weeks away and extends from 28 days to 14 days before the halving event. As of now, Bitcoin is about 28 days away from this pre-halving danger zone. However, he also emphasizes that being halfway through the pre-halving rally does not guarantee continuous upward momentum. Previous instances have shown that dips and periods of reaccumulation can occur even during this phase.
The Timing of the Halving
The Bitcoin halving is expected to take place in mid-April. This event occurs approximately every four years and reduces the number of new Bitcoins created by half. The upcoming halving will reduce miners’ rewards from 12.5 BTC per block to 6.25 BTC per block. This reduction in supply has historically been associated with bullish price movements for Bitcoin.
Current Market Situation
As of writing, Bitcoin is trading at $6,9572. The cryptocurrency has already experienced significant price action leading up to the halving, but it remains to be seen how it will perform in the coming weeks. Analysts and investors are closely watching for any signs of a potential price correction during the pre-halving danger zone.
Hot Take: What to Expect?
The Bitcoin market is at a crucial juncture as it approaches the halving event. While historical patterns suggest the possibility of a price correction in the coming weeks, it is important to note that past performance does not guarantee future results. Here are some key points to consider:
Potential Price Retracements
- The danger zone before the halving has historically been accompanied by price retracements.
- Bitcoin’s current rally may experience dips and periods of reaccumulation.
- Investors should be prepared for short-term volatility and potential price corrections.
Long-Term Bullish Outlook
- The Bitcoin halving is expected to reduce supply, which has historically driven bullish price movements.
- The reduction in miners’ rewards could lead to increased scarcity and higher demand for Bitcoin.
- Long-term investors may see the halving as an opportunity to accumulate more BTC at potentially lower prices.
Market Uncertainty
- The cryptocurrency market is known for its volatility and unpredictability.
- External factors such as global economic conditions and regulatory developments can impact Bitcoin’s price.
- Investors should carefully evaluate their risk tolerance and consider diversifying their portfolios.
In conclusion, as Bitcoin approaches the halving, it is important for investors to be aware of the potential risks and rewards. While historical patterns suggest the possibility of a price correction in the pre-halving danger zone, the long-term outlook for Bitcoin remains bullish. As always, it is crucial to conduct thorough research, stay informed about market trends, and make well-informed investment decisions.
By
By
By
By