Since its creation, Bitcoin’s unique economic model and fixed supply mechanism have always been a focus of market attention. As an important event in the Bitcoin ecosystem, the halving event has caused widespread research and discussion due to the fluctuations in Bitcoin price before and after the halving. Looking back at previous halving events, we can easily see that the performance of Bitcoin price follows certain patterns, which provides valuable reference for our investment decisions.
First Halving: November 28, 2012
In November 2012, Bitcoin experienced its first halving. Starting from November 2011, a year before the halving, the price of Bitcoin began to rise. After the halving, the price of Bitcoin skyrocketed and eventually reached a historical high of $1200 in November 2013.
During this cycle, the price of Bitcoin increased fourfold before the halving, and nearly a hundredfold after the halving, reaching a peak of $1200. The entire cycle witnessed an overall price increase of 350-400 times, demonstrating the significant impact of halving mechanism on the market. However, this was followed by a 14-month bear market, which made investors realize the cruelty of the market as the price of Bitcoin once dropped more than 80%.
Second Halving: July 10, 2016
The second halving of Bitcoin took place as scheduled in July 2016. Similar to the first halving, the market began to speculate before the halving, and the price of Bitcoin steadily rose from November 2015 to triple its value to $650 before the halving.
After the halving, there was a period of about three months of consolidation and correction, and then the price of Bitcoin started to rise parabolically, eventually reaching a historical high of $19,000 in December 2017. The entire cycle before and after the halving witnessed an increase of about 80-90 times.
However, similar to the market performance after the first halving, a deep bear market followed the peak, with the price once again dropping more than 80% over the course of 12 months.
Third Halving: May 12, 2020
Before the halving, Bitcoin started to rise from $7,000 in November 2019. Four months later, the COVID-19 outbreak led to a “March 12 plunge,” and at the time of the halving, Bitcoin was around $10,000. After about two months of consolidation, with the start of quantitative easing by the Federal Reserve, the price of Bitcoin began to rise and reached a peak of $69,000 in November 2021. Subsequently, Bitcoin entered another deep bear market, with the price dropping to a low of $15,000, a decline of about 75%.
Summary of Characteristics and Patterns of Previous Halvings
By reviewing the previous halving events, we can identify some common characteristics:
Firstly, the market starts to speculate about six months before the halving, although the price increase is relatively moderate and reaches periodic highs without breaking historical records.
Secondly, there is usually a period of consolidation or correction before and after the halving, which is a normal expression of the market digesting the impact of the halving and adjusting price expectations. About two to three months after the halving, the power of halving begins to show, and the market resumes its upward trend.
Lastly, the price increase after the halving is even greater, reflecting the market’s optimistic expectations for Bitcoin’s future value. With a parabolic acceleration to the climax, a new all-time high is achieved. However, the increase in each halving becomes smaller as the market capitalization grows.
Bitcoin’s Fourth Halving in 2024 and Price Reaction
On April 20, 2024, Bitcoin will experience its fourth halving. As observed from the historical patterns, the price starts to rise about six months in advance, around October 2023. However, this time, due to the narrative of Bitcoin spot ETF, the price reached a new high in March.
If this round follows a similar pattern to the historical cycles, it may take a few months for the price to react after the halving. Although there may be short-term price fluctuations, in the long run, the deflationary nature and limited supply of Bitcoin make it an attractive asset, and Bitcoin is expected to experience a significant bull market.
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Halving
Bitcoin
Bitcoin Halving
Bull Market
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Note: The views expressed in this article represent the author’s opinions and do not constitute investment advice.
Original article link:
https://www.bitpush.news/articles/6622878
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