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Bitcoin Halving 2024: How BTC’s New Reality Will Set the Year Apart

Last Updated March 24, 2024 1:12 PM
Shraddha Sharma
Last Updated March 24, 2024 1:12 PM
By Shraddha Sharma
Verified by Peter Henn

Key Takeaways

  •  Bitcoin enters “Danger Zone” pre-halving, triggering historical retracements.
  • Analysts anticipate potential supply shock amidst growing institutional demand.
  • Bullish sentiments prevail, with price projections ranging from uptrend to $100,000 by the end of the year.

As Bitcoin approaches its halving event in April 2024, investors are monitoring to see if the market will act any differently. Analyses suggest that Bitcoin has entered a critical phase which could have major implications for the year ahead.

Bitcoin Enters “Danger Zone”

According to Rekt Capital , Bitcoin has officially entered the “Danger Zone,” characterized by historical pre-halving retracements. These retracements typically occur 14 to 28 days before the halving event. Notably, past markets have reportedly seen a 20% retracement in 2020 and a deeper 40% one in 2016.

Bitcoin has seen some pullback after reaching an all-time high in March.

Sidharth Sogani, CEO of crypto research platform CREBACO Global told CCN: “Bitcoin halving happens every 4 years, before the halving there is always a slight 20-30% correction in BTC Prices. We have witnessed 2 corrections of 15-20% each this time. There has been solid buying by ETFs. About $65 billion has been pumped into the markets by ETFs in the last 60 days.”

Sumit Gupta, the co-founder of crypto exchange CoinDCX, previously told CCN that with the halving event, his company expects a potential supply shock due to increasing demand. He anticipates a combination of reduced supply and growing interest which could lead to significant momentum in the market.

Meanwhile, Sogani is also bullish. He said: “Most likely in either May or June onwards Bitcoin prices will go parabolic.. and the end of the year target (before elections) is $100,000.”

Bitcoin Analysts Are Bullish

Crypto analyst Michaël van de Poppe recently drew halving parallels with the 2016/17 cycle. He noted similarities in price action, highlighting a peak occurring four weeks before the halving, followed by consolidation and a subsequent correction. Van de Poppe anticipated a gradual upward trajectory in the months following the correction, moving in accelerated growth six months later.

Parth Chaturvedi, Investments Lead at CoinSwitch Ventures told CCN: “The cyclical nature of macro markets impacts all asset classes including crypto, and the peaking of interest rates, with a possible reduction in Fed rates in 2024, bodes well for ‘risk-on’ assets.

“Particularly for Bitcoin, there are a couple of additional forces at play, both from its inherent supply dynamics and an ongoing surge in demand from mainstream institutions via the newly launched spot BTC ETFs.”

Chaturvedi emphasized that while history doesn’t always repeat itself exactly, there are often similarities. He explained that Bitcoin operates on a predetermined supply schedule, where the rewards for miners are halved after every 210,000 blocks. The upcoming halving will reduce block rewards to 3.125 BTC. Previous halving events have typically triggered bull markets because of the sudden decrease in supply. 

However, this time, the halving coincides with a significant increase in institutional demand, particularly driven by spot Bitcoin exchange-traded funds (ETFs) as per the investment lead.

Chaturvedi added: “These demand and supply factors, coupled with decreasing interest rates, could send BTC prices higher. The markets already seem to be reacting in anticipation of the same. Spring seems to have arrived early.”

Spring for BTC

Bitcoin is close to its 2024 halving event. Market observers are vigilant but bullish. Some pre-halving retracements have been recorded but, historical data explain that with a future uptrend.

While there are varying commentaries on BTC price projections, the 2024 one would be a unique one due to increased institutional interest.

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