It has been quite a bearish week for Bitcoin, as the crypto is down about 3% since the start of the week. Notably, Bitcoin has struggled to break above $27,000 due to price action, indicating a potential risk of more losses below this resistance level in the short term.
However, according to one crypto analyst, this current retracement could be the start of a historic Bitcoin cycle before any halving.
Analyst shows Bitcoin price correction based on historical trends
Crypto analyst Rekt Capital has in a after that if Bitcoin’s historical halving cycles are any indication, a major price correction is looming. Bitcoin’s halving halves the block reward for miners.
This happens approximately every four years to slow the creation of new BTC and keep inflation in check. Based on historical data from the previous two Bitcoin halvings, the price of BTC could fall by as much as 38% before the next halving.
In a chart shared on In the 2015 cycle, BTC returned 25% 196 days before the 2016 halving.
In 2019, BTC recovered 38%, 196 days before the 2020 halving. So with the next halving set to take place around April 2024, it looks like the market is now in a prime position for the next correction.
Previous halving trends | Source: X
Bitcoin is currently 60% below all-time highs, following a similar pattern with previous halvings. 200 days before the 2020 halving, BTC was 60% below its value highest ever. Similarly, BTC was 65% below its value 200 days before the 2016 halving highest ever.
What a correction would mean for BTC
Bitcoin’s price direction is currently uncertain, especially as on-chain transactions on the blockchain are now at a three-month low. Statistics about the chain have shown this 95% of Bitcoin’s circulating supply has not changed hands in the past month as investors appear to hold on to the cryptocurrency while waiting for the SEC’s stock price. approval of spot Bitcoin ETFs.
While past performance does not always repeat itself, Bitcoin could see a major correction if this pattern occurs again before the next halving. With the current price of BTC at $26,770, a 38% retracement could see BTC fall below $18,000. If this happens, it would be devastating for BTC holders.
While a price correction may be in the offing, Bitcoin’s longer-term growth prospects remain strong. Over the past decade, Bitcoin has shown a consistent upward trend as the largest cryptocurrency by market capitalization, despite several setbacks.
Bitcoin has been given the name best performance this year in asset investing by Reflexivity, a digital asset research firm. According to billionaire hedge fund manager Paul Tudor Jones, this is the case best time to buy BTC.
BTC price at $26,782 | Source: BTCUSD on Tradingview.com
Featured image from Asia Crypto Today, chart from Tradingview.com