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Bitcoin Price Corrects 15%: Comparing it to 2020 Pre-Halving BTC Decline

Last Updated April 16, 2024 10:57 AM
Valdrin Tahiri
Last Updated April 16, 2024 10:57 AM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • Bitcoin’s price declined nearly 18% after its all-time high in March.
  • The correction shares similarities to one before the 2020 halving.
  • Is the BTC price bottom in, or is another lower low likely?

Bitcoin’s fourth halving will be at block height 84,000, projected to take place on April 19, with 527 blocks remaining until the halving. Even though the halving is a deflationary event, the BTC price has been correcting for over a month.

A similar pre-halving correction occurred in 2020. After that, the BTC price began a two-year long bullish trend. When comparing it to the current decrease, the pattern could suggest the BTC price will reach a bottom this week.

Pre-Halving Corrections

The third Bitcoin halving was in May 2020. Three months before it, BTC  went through a 65% correction, which took it close to its 2019 lows. Afterward, the price began its upward trend continuing for two years.

The March 2020 correction was also seen in traditional markets, triggered by the start of the Coronavirus pandemic.

Another 18% correction occurred the week before the halving (red). This one is more like the current correction, which has a similar magnitude but has transpired over a nearly two-month period.

Bitcoin Price Correction Pre-Halving
BTC/USDT Weekly Chart | Credit: TradingView

While the magnitude for the corrections is the same, the RSI reading is completely different. In 2020, the RSI had just moved above 50, while it is crossing below 70 (white) in 2024.

The different RSI reading can be explained by the fact the crypto market is in a unique spot relative to its halving, since the BTC price has already reached a new all-time high.

BTC Price Prediction: Is the Bottom Close?

The two-day time frame movement shows that BTC is likely in the fourth or fifth sub-waves (black) of wave three (white). The entire upward movement started in November 2022.

Since wave three has extended, giving it 2.61 times the length of wave one can lead to a high of $90,000.

However, while the BTC price bounced at the 0.382 Fibonacci retracement support level of $60,300, it is not certain if the correction has ended or another low is likely.

Ongoing BTC Price Correction
BTC/USDT 2-Day Chart | Credit: TradingView

A closer look at the movement suggests a slightly lower low is probable. This is because the correction has been contained inside a descending parallel channel and its support trend line was not reached during the April 13 low. The trend line is currently at $59,800.

The daily MACD aligns with this reading, since it is nearly at the -1,000 level. The same level coincided with the two previous local bottoms (green icons).

Short-Term BTC Price Correction
BTC/USDT Daily Chart | Credit: TradingView

So, while the wave count, price action and RSI readings suggest another lower low is probable, the correction is nearing its end.

Bitcoin Price Corrects but Post Halving Rally Imminent

The readings from the daily and 2-day time frames predict the Bitcoin price decline is coming to an end. While it is possible a slightly lower low occurs, a significant post-halving rally is the most probable scenario. A similar correction and subsequent increase transpired in 2020.

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