How does Bitcoin price move historically 1 month before halving? – TradingView News

BTC halving breakdown

Blockchain mining involves maintaining a consistent, up-to-date and immutable record of transactions performed by miners. These miners are rewarded with newly created coins for their efforts. Satoshi Nakamoto programmed Bitcoin so that every 210,000 completed blocks the reward for miners is halved.

Expected around April 17, 2024, the fourth halving will reduce mining rewards from 6.25 BTC to 3.175 BTC at block height 840,000. There will be a total of 32 halvings, with another 29 expected until year 2140 when new BTC creation ends.

Ultimately, the total supply of Bitcoin is limited to 21 million coins, of which less than 2 million have yet to be created. Currently, around 900 Bitcoins are mined worldwide daily, which serve as rewards for miners who validate and secure the network, according to data from IntoTheBlock.

The Bitcoin halving affects the price through supply and demand dynamics, with fewer coins available leading to potential price increases. Reducing sales pressure, halving may have a greater effect in the upcoming event due to potential demand increases. Historically, Bitcoin’s value has risen within the same year as a halving event.

Source: IntoTheBlock

Overall, Bitcoin has experienced four bull runs that coincided with halving events, with Bitcoin hitting $1,000 after the 2012 halving and $20,000 after the 2016 event. The most recent halving occurred in mid-May 2020, before a significant bull cycle that peaked in November 2021 at a high of $69,000.

First halving, 2012

In 2012, Bitcoin was relatively unknown outside of cypherpunk circles. However, one year before the first halving, Bitcoin’s value had already soared almost fourfold.

The first Bitcoin halving occurred at block 210,000, reducing the block reward from 50 BTC to 25 BTC. This event caused tension among crypto-investors, fearing it could discourage miners and coincided with Bitcoin’s rise to mainstream attention.

Just a month before the 2012 halving, BTC was at $10.26, with no significant price movements until the event. One month after the halving, the average price was $13.42.IntoTheBlock

Second Half, 2016

The second halving took place on July 9, 2016, reducing the block reward from 25 BTC to 12.5 BTC, thrusting Bitcoin and crypto into the spotlight amid media scrutiny, coinciding with the altcoin and ICO madness, which has seen its fair share of scams.

On June 9, 2016, BTC was priced at $583.11 and grew to $597.5 after the event. IntoTheBlock

Later movements were much more significant. Despite a subsequent drop from $1,200 to nearly $200 in 2015, the halving event saw Bitcoin’s price rise from about $650 to nearly $19,000 before crashing below $4,000.

Prices were significantly higher than the first halving, but still far from the peaks of subsequent years. BTC reached $766 per unit on June 16 before falling 13.83% to $660 on the halving date. Nevertheless, by December 31, 2016, Bitcoin’s price had risen to $963 per unit.

The price fell to $670 at the time, but rose to $2,550 by July 2017. Despite traders expecting another bull run, Bitcoin’s price saw a massive rally in 2017, followed by a drop to around $3 700 by the beginning of 2019.

Third halving, 2020

However, the third halving in 2020 occurred amid the COVID-19 pandemic BTCUSD patterns remained consistent. This event, at block 630,000, halved block rewards to 6.25 BTC, where they will remain until the fourth halving in April 2024.

During this time, influential investors publicly endorsed Bitcoin. As institutions began to explore adoption, crypto payments became more widespread.

In the six months leading up to the 2020 halving, Bitcoin experienced a 300% increase in price, mirroring similar patterns observed before previous halving events.

Before the 2020 halving, Bitcoin traded at around $9,000, reaching a record high of $67,549 after halving, and then settled around $20,000 for some time. IntoTheBlock

The 2020 halving preceded Bitcoin’s peak at $69,000, but the price rise was not immediate; in some cases it took months for Bitcoin to reach new highs.

After the market crash on March 11, 2020, Bitcoin experienced a significant price drop, falling from $7,944.05 to $4,857.31, representing a 38.85% drop, although not surpassing the 2012 drop not.

Nevertheless, Bitcoin saw a significant surge at the end of 2020, rising from around $11,000 in October 2020 to around $60,000 by March 2021. Bitcoin ended 2020 at $29,228 per coin, a remarkable 302% increase for the year means.

Fourth halving, April 2024

With only three Bitcoin halvings to date, drawing definitive conclusions about BTC’s pre- and post-halving performance remains challenging. However, it is consistently noted that Bitcoin’s price is lower one month before each event than at the time of the halving.

So far, Bitcoin’s price has more than tripled since February 2023. The 2024 Bitcoin halving coincides with significant events, including the game-changing approval of a spot Bitcoin ETF in the US and the Federal Reserve’s likely move toward rate cuts.

One key aspect of the upcoming halving is the proactive measures miners are taking to address revenue challenges, such as share offerings and reserve sales. Potential adjustments in mining difficulty, affected by changes in hashrate, can lower production costs for miners.

Furthermore, the rise of inscriptions has led to increased activity in the chain, with token collections generating significant transaction fees. Additionally, the halving could occur alongside potential quantitative easing by the Federal Reserve to support economic recovery, suggesting a subdued bull run.

Historical data analyzed by IntoTheBlock indicates an upward price trend following halving events, while the current cycle shows prices rising earlier than expected, indicating that investors can anticipate the “halving effect”.

The Bitcoin halving occurs in April, and historical patterns point to a potential upswing in price post-halving events.

Yet this cycle deviates from the past, with prices rising earlier than expected. This may indicate that investors are anticipating and reacting to… pic.twitter.com/mzNPLhVKBW — IntoTheBlock (@intotheblock) February 27, 2024

JPMorgan’s recent report suggests the possibility of the BTC price falling to $42,000 due to miners’ reduced rewards and higher production costs due to the April halving. Currently at $26,500, this cost is projected to double to $53,000 after halving.

Closure

While the analysis of Bitcoin halving dates provides insights, it is important to note that it does not tell the whole story. Price fluctuations are influenced by various factors, including broader market trends and shifts in cryptocurrency popularity, as seen through 2021.

However, Bitcoin’s halving cycles typically follow a pattern of rally, correction, consolidation, and eventual post-halving bull run. Despite significant price increases after each halving, there are consistent pullbacks, leading to broader market delays.

Halves typically coincide with price increases, but other factors such as market sentiment and regulatory changes also affect prices, highlighting the need for a broader perspective when analyzing market trends. Since there have only been three Bitcoin halvings to date, it is difficult to draw definitive conclusions about BTC’s performance before and after these events.