In the realm of cryptocurrency, Bitcoin’s path during its halving cycles is a story of regular rhythms in a turbulent market. The study on the mechanics of the Bitcoin halving event that reduces the reward for mining of new blocks by half—leads to the occurrence of interesting patterns repeating itself between the cycle of 2016 to 2020. In a recent YouTube video, Rekt Capital presented his thoughts that Bitcoin’s before and after halving patterns become evident which offers a look into its probable future paths by comparing it with past movements.
The story starts from the pre-halving downtrend, which had just ended with an 18% decline in January, rescaling the drops of the 2020 and 2016 cycles. This phase is the combination of reaccumulation and consolidation with a significant decrease serving as a prelude to the next rally.
The Bitcoin Cycle’s Dual Narratives
The next chapter starts with the pre-halving rally, which is a period when Bitcoin usually surges to new all-time highs. This rally, as usual kicking off about 60 days before the halving, proves that Bitcoin possesses the quality of an explosive rise on the anticipation of that event, showing an extraordinary jump in value in this cycle similar to previous years.
Nevertheless, the storyline shifts with pre-halving retracement that is represented by an 18% pullback in the current cycle. This phase is reminiscent of the pre-halving retraces of previous cycles up to 40% in 2016 and 19% in 2020, which denote a change in market sentiment from exuberance to caution.
Reaccumulation phase, the market undergoes consolidation that may lead to its growth in the future. This phase comes as a significant event where one can take the advantage and accumulate more Bitcoin at better prices before the post-halving rally.
Historical observations indicate that after halving Bitcion may initiate a parabolic rise which looks the same as it did after 2016 and 2020 halvings. The expected spike is a reflection of the circular nature of the movements of Bitcoin’s market, indicating prime opportunities for strategic investment and accumulation.
