Bitcoin Halving: What It Means for the Market
Introduction
They say, “As goes Bitcoin, so goes the market.” This saying often holds true, especially around Bitcoin Halving events. The fourth Bitcoin Halving took place on April 20, 2024. Historically, these events have sparked major rallies in the crypto market. However, these rallies don’t start immediately. To predict where the market may go next, let’s take a closer look at the third Bitcoin Halving, which took place on May 11, 2020.
Understanding Bitcoin Halving
Bitcoin Halving is an event that occurs approximately every four years. During this event, the reward for mining new Bitcoin blocks is halved, reducing the rate at which new Bitcoins are generated. This reduction in supply is designed to continue until the maximum supply of 21 million Bitcoins is reached.
The Third Bitcoin Halving: A Historical Analysis
To understand how Bitcoin Halving affects the market, we need to analyze the third Bitcoin Halving. This event took place on May 11, 2020. Let’s review the price data from Binance accessed via TradingView, using closing prices to see the changes.
Six Months Before the Halving
As of November 11, 2019, the third Bitcoin Halving was six months away. The price of BTC was 8,733.27 USD.
On the Day of the Halving
On May 11, 2020, the third Bitcoin Halving occurred. The price of BTC was 8,561.52 USD. This price was 1.97 percent lower than the price six months earlier.
Six Months After the Halving
As of November 11, 2020, the third Bitcoin Halving had taken place six months earlier. The price of BTC was 15,684.24 USD. This price was 83.19 percent higher than the price on the date of the Halving.
Eighteen Months After the Halving
As of November 8, 2021, the third Bitcoin Halving had taken place almost eighteen months earlier. The closing price of BTC was 67,525.83 USD. This price was 688.71 percent higher than the price on the date of the Halving. (Note: This date does not appear on the chart.)
Impact of Bitcoin Halving on Market Rallies
As you can see, the third Bitcoin Halving was a catalyst with a delayed reaction. Following the Halving, the price of BTC increased 83.19 percent in six months, but it increased another 605.52 percent in the next twelve months or so. This pattern shows that Bitcoin Halving can lead to significant price increases over time.
The Fourth Bitcoin Halving: What to Expect
The fourth Bitcoin Halving took place on April 20, 2024. If history is any guide, then we may not see much price movement for another four or five months. Will the multiple Spot Bitcoin ETFs accelerate this timeframe? It’s hard to say. However, many believe that the biggest gains are still ahead of us.
Bitcoin Price Trends and Predictions
To predict where the market may go next, it’s important to look at historical price trends of Bitcoin Halving events. By comparing the price changes six months, twelve months, and eighteen months after each Halving, we can get an idea of possible future trends.
Bitcoin Price Movements in Context
It’s worth noting that unlike in 2020, Bitcoin had already more than doubled in price in the six months prior to the fourth Halving. Also, comparing it to one previous event is fairly limited. We should look at each previous Halving to get a fuller picture.
Conclusion
What do you think of the historical price of BTC? Do you think that this price history can help us predict where the market goes from here? 🤔
Did anyone else notice that the 4th Bitcoin Halving occurred on a date that is also a palindrome? 4202024
Past performance is no guarantee of future results. All models are wrong. Some are useful.
Final Thoughts
As we wait to see how the market reacts to the fourth Bitcoin Halving, remember to keep an eye on historical trends and market indicators. The impact of Bitcoin Halving on crypto market rallies is clear, but the timing and extent of these changes can vary. By staying informed and analyzing past events, you can better predict future market movements.
