- A massive retracement before the BTC halving is ‘not unusual’.
- An extended rally always follows the halving, which lasts 6 to 18 months.
Bitcoin [BTC] recovered after a dovish interest rate decision by the US Fed, posting a 9.5% gain and recovering $68,000 on March 20
This was after a decline of more than 14% from a high of $73,000. However, the recovery was not sustainable as BTC fell back to $66K at the time of writing.
The competitive prices have attracted commentary from expert analysts, citing historical data to gauge price projections after BTC’s halving.
Speaking to Yahoo Finance in a interview On March 21, Mark Palmer, senior digital assets research analyst and director of Benchmark, said the current price action was “not unusual.”
He added,
“What we saw during the two previous halvings, which took place in 2016 and 2020, was a significant price drop prior to that event. In 2016 this was almost 40%. In 2020 it was around 20%, which is essentially what we saw in the 2024 cycle.”
Palmer cited the uncertainty surrounding the halving as a driver of the retracement. He noted that most miners leave the market during this period.
Bitcoin Price Outlook After Halving
At the post-halving, Palmer noted that;
“In 2016, we saw volatility leading up to the halving, after which Bitcoin’s price rose 17x. In 2020 that was 6x.”
As such, he noted that Bitcoin always has an extended rally after the halving, which lasts about “18 months.”
A recent Coinbase Institutional remark shared a similar observation with customers about the halving event.
“Price action around previous halvings supports this view: Bitcoin gained an average of 61% in the six months leading up to previous halvings, and rose an average of 348% in the six months following halvings.”
However, Coinbase noted that not all halvings are “created equal” when looking deeper into the historical data.
The 2024 halving cycle is unique in two respects: a rebound in institutional demand fueled by spot BTC ETFs and potentially favorable macro factors, especially if the Fed initiates rate cuts.
These are bullish catalysts for post-halving scenarios in BTC prices in the 2024 cycle. However, it remains to be seen whether the current cycle will follow the historical data.