The crypto community is gearing up for the upcoming Bitcoin halving event. This significant occurrence happens every four years, slashing the market supply of new Bitcoin (BTC) by half.
The crypto industry is emerging from a challenging period known as the “crypto winter.” Now, high-profile figures like Binance CEO Changpeng Zhao and BTC analysts are directing their attention to the impending halving event, expressing optimism.
Scheduled for April 2024, the next halving event will see the reduction of the Bitcoin mining reward from the current 6.25 BTC per block to 3.125 BTC per block. Changpeng Zhao, in a post on X , initiated a countdown, emphasizing that the next BTC halving is only 135 days away.
Bitcoin Halving Dynamics: Supply, Demand, and Bullish Trends in Price
Traditionally, the Bitcoin halving is associated with a bullish trend for the BTC price, driven by supply and demand dynamics. The decrease in new supply, combined with rising demand, usually propels BTC prices to new highs after the halving.
Looking back at the last halving in May 2020, two months prior to the event, Bitcoin was trading at under $10,000. As the halving approached, a surge in bullish momentum led to BTC surpassing the previous cycle’s all-time high of around $17,000. Subsequently, post-halving, Bitcoin entered a parabolic phase, reaching an all-time high of nearly $69,000.
Rekt Capital, a popular trader and analyst, also shared insights on the different phases of a BTC bull cycle on X. Furthermore, the analyst divided the timeline into pre-halving and post-halving events. He highlighted a pre-halving rally approximately 60 days before the event. This rally, fueled by investor hype, often sees a retracement around the actual halving.
Bitcoin Halving Cycles: Retracement, Reaccumulation, and Parabolic Surges
Historically, the pre-halving retracement was 38% in 2016 and 20% in 2020. Following the retracement, a multi-month reaccumulation phase begins, marked by fluctuations in the BTC price.
This period can lead to boredom, impatience, and disappointment among some investors. The subsequent accumulation phase sets the stage for a parabolic surge. Moreover, During this phase, Bitcoin breaks out from reaccumulation, experiencing accelerated growth towards new all-time highs.