The Bitcoin Halving: What to Expect
In just 193 days, the Bitcoin halving will occur, reducing the reward miners receive for new blocks. This event, which happens every four years, has historically had a significant impact on Bitcoin’s price. To understand what might happen next, let’s unpack the different phases of the Bitcoin halving.
Pre-Halving Retrace and Rally
Prior to the halving, there is typically a period of deeper retracement in Bitcoin’s price. This retracement is expected to occur over the next 140 days. However, around 60 days before the halving, a pre-halving rally usually takes place as investors “buy the hype” and anticipate positive outcomes.
Retrace and Re-Accumulation
Following the pre-halving rally, there is often a retrace around the time of the halving event. This dip in price has been observed in previous halvings, with declines of -38% in 2016 and -20% in 2020. After this retrace, there is typically a multi-month re-accumulation phase characterized by investor fatigue.
Parabolic Uptrend and Potential Pressures
Once Bitcoin breaks out of the re-accumulation zone, it tends to enter a parabolic uptrend marked by rapid price increases and new all-time highs. However, there are potential pressures on Bitcoin’s price that could impact its trajectory. These include macroeconomic headwinds and intrinsic dangers such as alleged financial maneuvers by individuals like Justin Sun and supply pressures from various sources.
Hot Take: Potential Challenges Ahead
While the upcoming Bitcoin halving presents opportunities for price increases, there are also potential challenges that could affect the market. Concerns have been raised about the actions of certain individuals, such as Justin Sun, and their impact on Bitcoin’s price. Additionally, there are supply pressures from various sources, including Celsius, FTX, the US Government’s planned sale of Silk Road-related BTC, and potential selling by miners. It’s important to stay informed and monitor these factors as the halving approaches.
At present, Bitcoin is trading at $27,726, having bounced off key support at $27,370.
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