Pseudonymous crypto trader Rekt Capital has shared insights with their 349,000 followers about the potential market movements of Bitcoin (BTC) leading up to its next halving event, scheduled for April. Rekt Capital outlines a five-stage process typically associated with Bitcoin’s halving cycles.
Rekt Capital notes that historically, Bitcoin often experiences a significant dip in the months preceding a halving. This trend was observed in previous halvings and is expected to recur in 2024. According to Rekt, there might be a two-week window for investors to buy Bitcoin at lower prices, considering an 18% retrace already occurred in January. This period is viewed as one of the last opportunities for “bargain buying” before the halving.
Approximately 60 days before the halving, Bitcoin is expected to enter a “pre-halving rally” phase. During this time, traders often buy into the hype surrounding the halving, anticipating a price increase.
Rekt Capital points out that a “sell the news” event usually happens one to three weeks before the halving. This phase is characterized by a price dip, as seen in 2016 (38% dip) and 2020 (20% drawdown), where traders sell their holdings in response to the actual halving event.
Following the halving, a prolonged period of mostly sideways movement in Bitcoin’s price is typical. This phase, which can last an average of 150 days, often leads to investor disappointment and a “shakeout” of those expecting immediate price surges.
Finally, after months of sideways movement and accumulation, Bitcoin is expected to enter a phase of accelerated growth, marked by parabolic uptrends.
While Rekt Capital’s analysis focuses on the halving as a key driver of Bitcoin’s price action, not all experts agree with this assessment. Ralph Zagury of Swan Bitcoin, speaking at a panel discussion, argued that market liquidity, rather than the halving event, will play a more crucial role in influencing Bitcoin’s price in 2024. Zagury suggests that market flows, rather than the mechanics of the halving, are more likely to drive price changes.
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