Bitcoin Could Enter “Danger Zone” as Halving Event Approaches, Warns Analyst
A well-known crypto analyst predicts that Bitcoin is on the verge of entering a phase in the market cycle that has historically led to significant price corrections. In a recent video update, the analyst explains that Bitcoin is just one week away from entering a “theoretical technical danger zone” that has previously caused price dips of up to 30%. This danger zone occurs in the weeks leading up to the halving event, when miners’ rewards are halved. With the halving event approximately 35 days away, the analyst warns investors to be cautious.
Previous Market Cycles
- The analyst points out that in the two previous market cycles, Bitcoin experienced significant corrections two to four weeks before the halving event.
- In 2020, there was a 20% pullback approximately two weeks before the halving event.
- In 2016, there was a 29% pullback around 28 days before the halving event.
Potential for Pullbacks
The analyst suggests that since there hasn’t been a 30% pullback during the current cycle, it is possible that such a correction could occur before the halving event. While there was a 14% dip last week and an 18% pullback in January, these figures do not reach the level of correction seen in previous cycles. Therefore, it is conceivable that a pullback of around 20%, or even as much as 25% or 30%, could happen before the halving event.
Bitcoin’s Current Price
At the time of writing, Bitcoin is trading at $71,882, experiencing a slight decrease in the last 24 hours.
Hot Take: Exercise Caution as Bitcoin Approaches the “Danger Zone”
As Bitcoin approaches its halving event, it is crucial for investors to exercise caution and be prepared for potential price corrections. Historical data suggests that significant pullbacks have occurred in previous market cycles leading up to the halving. Therefore, it is wise to consider the possibility of a similar correction occurring this time around. While Bitcoin’s current price remains high, it is important to remember that market cycles are a natural part of the cryptocurrency landscape. Stay vigilant and make informed decisions as the halving event draws near.
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