Bitcoin: the forecasts indicate a correction before the halving

Bitcoin starts the week with a smile, printing a +1.44% in the last 24 hours and positioning itself above $52,400: however, price forecasts indicate the possibility of a strong retracement before the April halving.

Historically, in fact, Bitcoin has always experienced a decrease in its value before each halving event for miners’ rewards, only to promptly recover in the following months.

Will history repeat itself this time, with a completely different scenario from previous years?

Summary

• Bitcoin Forecast: potential price correction before the halving
• The overall outlook of Bitcoin and the crypto market

Bitcoin Forecast: potential price correction before the halving

Despite the current Bitcoin price forecast based on charts indicating strength

remarkable for the crypto asset, the analysis of previous market cycles suggests the possibility of a strong “dip” before the halving, expected on April 18th.

Historically, Bitcoin has always increased in value from six to seven months before the quadrennial halving of the block-reward for network miners, only to promptly slide a few months before the fateful event and finally rebound after its completion.

In January, this theme was particularly felt on the discussion squares of Reddit, within the r/bitcoin forum where price predictions and infrastructure developments are usually discussed.

A social media user has attracted nearly 1000 positive votes by talking about a hypothetical crash before the halving, at a time when everyone was shouting about the hunt for long. Here are his words in the post on Reddit:

“There is always a drop before the halving. Does this have something to do with miners? It just seems counterintuitive, because everyone, even their mothers, knows that the price will increase after the halving.”

By analyzing in detail the price trend of Bitcoin from 2009 to 2024, we immediately notice that a pre-halving correction turns out to be a common denominator for the start of each bull market.

In 2012 for example, Bitcoin reached a positive peak of 13.50 dollars on August 17, only to drop by 40.74% in just 3 days. In that circumstance, after the halving that occurred in November, the prices of the cryptocurrency had reached a new high.

In 2016, the cryptocurrency reached a peak of $766 on June 16, before experiencing a 13.83% drop to $660 in mid-August, then returning to above $960 after the long-awaited halving of the block reward at the end of the year.

In 2020 we witnessed the same process, intensified by the collapse of the stock markets on March 11 identified as ” black Thursday ” in conjunction with the spread of covid-19 worldwide. Bitcoin reached $10,000 in early February that year, frighteningly dropping to $4,850 in March, with a minimum recorded of $3,800.

Despite the particularly delicate situation, Bitcoin recovered the lost ground post-halving and closed the year with a value of 29,200 dollars, marking a 302% increase on an annual basis.

By the beginning of 2024, Bitcoin has already grown by 21.17%, opening the doors to yet another bullish crypto market that could soon take it to new all-time highs.

First of all, however, if history were to repeat itself, we could expect a drop, at least below $45,000.

Some users on Reddit, following the post mentioned earlier, have revealed to have set aside funds to invest in case the price were to drop as it happened in previous years.

The strategic approach of investors and the confident attitude of the Bitcoin community, indicate that despite the alleged correction coming, the forecasts for the end of the year will bring the crypto to a higher value than the current one

The overall outlook of Bitcoin and the crypto market

Despite historical price predictions for bitcoin suggesting a high probability of encountering a retracement before the halving, the overall outlook of the crypto market seems to show a situation that is anything but negative.

With a current price of 52,400 dollars, a market capitalization of 1.02 trillion dollars, an increasing aggregate open interest of 14 billion dollars, and a predominantly positive funding rate on major derivative markets, Bitcoin seems to be aiming for new highs above 69,000 dollars in the near future.

Robert Kiyosaki, renowned investor and author of the bestseller “Rich Dad Poor Dad”, goes against the historical events of Bitcoin and predicts a price of $100,000 by June, just two months after the much-anticipated halving.

BITCOIN to $100k by June 2024.

— Robert Kiyosaki (@theRealKiyosaki) February 18, 2024

The circumstances in which the crypto is now fluctuating are extremely different from those of past years, where the market was less mature and there was less awareness of the potential of the asset.

Today, in 2024, with the first Bitcoin spot ETFs approved at the beginning of the year and with the global speculative markets enormously strong despite the various technical recessions recorded by many countries (e.g. Japan and Germany), history may not repeat itself.

It is also worth noting how the trend of interest rates on US Treasury securities has taken a completely different path compared to previous years. From 2009 to 2016, rates were almost close to zero, then reaching a peak of 2.40% in April 2019 and returning close to zero in 2020.

Today we find ourselves with interest rates at 5.25% and with the prospect of a cut by the end of the year, with the forecast of favoring risk-on markets like Bitcoin.

This could strongly impact the price action of the crypto asset until the halving occurs, supporting its value above $50,000.

Returning to the technical analysis of prices, on which we started, we can highlight how this time the bullish momentum of Bitcoin is particularly stronger compared to the previous pre-bull market cycles.

As a user on Twitter points out, this is the first time in the history of the asset that Bitcoin returns above the 0.618 Fibonacci retracement level (which refers to the maximum of 2021 and the minimum of 2022) before the halving.

Usually that level has always been regained after the halving of rewards for miners.

This time for Bitcoin could be completely different: fasten your seatbelts and enjoy the show.

#Bitcoin has never closed a weekly candle above the .618 retrace prior to the halving from cycle top to low in its history

That can change this Sunday: pic.twitter.com/EKlQgkzfmE

— Matthew Hyland (@MatthewHyland_) February 15, 2024

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