Bitcoin Halving Just Two Weeks Away: Why This Time Is Different
What Will Happen After the Bitcoin Halving? | Credit : Getty Images
Key Takeaways
- The fourth Bitcoin halving is expected to take place on April 20, 2024.
- Bitcoin’s price has corrected since its all-time high on March 14.
- Will the BTC price increase after halving or is the event priced in?
There have been three Bitcoin halvings so far; on November 28, 2012, July 9, 2016, and May 11, 2020. The fourth one is expected to be on April 20, 2024 at block height 740,000 . It will cut block rewards from 6.25 BTC to 3.125 BTC per block.
Unlike the previous halvings, this is the first time the BTC price is already at an all-time high. What will be the repercussions for the ensuing trend? Will the cycle end sooner, or is this the beginning of a super cycle instead?
Why This Bitcoin Halving is Different
The BTC price has never broken its all-time high before the halving. In 2012 (white), the previous all-time high came 530 days before the first halving, while the next one was 105 days after it.
The second halving (red) was 920 days after the previous all-time high. Afterward, it took the BTC price 322 days to reach a new one. The third halving (blue) was 890 days after the previous all-time high (blue). Then, it the BTC price needed 225 days to reach a new one.
The upcoming halving is roughly 900 days after the previous all-time high. However, for the first time in Bitcoin’s history, an all-time high has arrived before the halving.
Excluding the first halving, which was less than four years after Bitcoin’s inception, a common observation is that the halving is roughly 900 days after the BTC price reaches its all-time high.
When looking at the weekly RSI reading, the current cycle is most similar to that in 2016. These are the only two times where the weekly RSI sent overbought signals during the halving (red circle).
In 2016, the BTC price corrected immediately after the halving and then resumed its parabolic ascent toward a new all-time high.
Previously, the BTC price had never reached a new all-time high before halving. This all changed this year, when BTC reached its all-time high of $73,747 in March.
How Does the Movement Compare to 2016?
Looking at the BTC movement in 2016 and 2024, similarities arise between the two cycles in regard to their price action. Both times, the price was rejected by the 0.618 Fibonacci retracement resistance level (red icon) and the channel’s resistance line.
Then, the price broke out from the channel, reached its all-time high and then validated it as support (green icon).
If BTC follows this pattern followed, it will validate the channel’s resistance trend line as support after the halving and then it will resume its parabolic ascent.
In 2016, the BTC price increased by 900%. However, due to diminishing returns in subsequent cycles this seems unlikely to happen again.
In the current cycle, the BTC price seems to be approaching the top of wave three in a five-wave upward movement. The sub-wave count (black) shows an extended wave three which can end at $90,400, giving waves 1 and three a 1:2.61 ratio.
A preliminary target for the top of the entire movement is at $130,700. However,we can project a more accurate one as soon as wave four is over.
Current BTC Cycle Can End Sooner
To conclude, the price movement before the current cycle has been unlike the previous ones, mainly due to the fact that the BTC price already reached a new all-time high. The movement has some similarities with that surrounding the second halving in 2016.
Due to the speed of the current cycle, it is possible that this cycle will reach its top sooner, possibly in the first quarter of 2025.
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