After the successful approval of the mock Bitcoin ETF by the SEC, the eyes of cryptocurrency market participants are slowly turning to the second biggest event of 2024 – the BTC halving. Halving the reward for miners of the Bitcoin network has historically catalyzed a mature bull market.
However, high volatility has historically characterized BTC price action in the weeks and months leading up to the halving event. 2016 Bitcoin experienced a huge surge, only to undergo a correction immediately after the halving. In 2020, on the other hand, deep declines occurred 2 months before halving and were associated with the COVID-19 crash.
The dynamic increases in the BTC price that have continued since the beginning of 2023 may make the latter scenario more likely. The cryptocurrency market is pretty heated today, and many analysts are looking for signals of a deeper correction. Should we expect drops in anticipation of the BTC halving?
Correction before halving will repeat 2019
The current situation on the BTC price chart shows numerous technical similarities with the 2019 fractal. If the scenario of the previous cycle now materializes, Bitcoin could fall by as much as 53% and re-enter the $23,000 level.
Events in the months leading up to the 2020 halving were quite dramatic. At the end of the 2017 bull market, the price of BTC hit a historic all-time high (ATH) just below $20,000. Then the bear market drove the price to a macro bottom at $3,215 in December 2018, resulting in an 84% decline.
Read more: What is Bitcoin Halving?
Later, the Bitcoin price rose to a local high of $13,764. It was located in the golden pocket area defined by the 0.5-0.618 Fib elimination of the entire downward movement (blue circle).
It appeared that this local peak started a deeper correction, the first target of which was again the 0.618 Fib elimination for the upward movement. Bitcoin fell to a low of $6477, losing 53%.
A rally has started with this standard market correction, which may last until the halving scheduled for May 2020. However, a black swan and a collapse in global markets due to the COVID-19 pandemic led to another bottom. Bitcoin briefly dropped back to the $4,000 level, forming a long-term double-bottom pattern (red circle).
However, just a few weeks later it recovered around $9,000, and this price held right before and after the May 2020 halving. Interestingly, the mature bull market only started in July 2020, 55 weeks (more than a year) after the local 2019 peak (blue circle).
Will the 2019 Fractal take place in 2024?
The current technical situation on Bitcoin’s long-term chart is very similar to that of 2019. Continuous increases have also just led the BTC price to the gold pocket area and a local high of $48,750 (blue circle). Interestingly, the achievement of this macro level coincides with the approval of the spot Bitcoin ETF.
If this area serves as a local high, we can expect the beginning of a deeper correction in the cryptocurrency market. If the BTC price were to drop back to the 0.618 Fib retracement for the entire up move, the move down would lead to the $28,000 level.
However, if the drop were to deepen and reach 53% – similar to the previous cycle – Bitcoin could see a bottom in the $23,000 area. This support level coincides with another important 0.786 Fib retracement.
If, on the other hand, time agreement were also held between the current market and the previous cycle, the start of a mature bull market would not be expected until 55 weeks from now. This period only takes place in January 2025.
Read more: Bitcoin Halving Cycles and Investment Strategies: What to Know
Click here for BeInCrypto’s latest crypto market analysis.
Disclaimer
In compliance with the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to independently verify facts and consult with a professional before making any decisions based on this content. Please note that our terms and conditions, privacy policy and disclaimers have been updated.
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
Ultimately, any crypto adventure you embark on is yours alone. We’re just happy to be your crypto companion, cheering you on from the sidelines (and maybe sharing some snacks along the way). So research, explore, and remember, with a little knowledge and a lot of curiosity, you can navigate the crypto cosmos like a pro!
UnCirculars – Cutting through the noise, delivering unbiased crypto news
