Bitcoin halving, extraordinary news? For analysts it seems so!
Less than three weeks remain until Bitcoin's fourth halving in history, and tension is mounting. All eyes are on the upcoming reduction in rewards for validating individual new blocks on the Bitcoin network because this phenomenon has historically been accompanied by price increases. Each halving has triggered a massive revaluation of Bitcoin, leading to exponential price growth.
Today, the price of Bitcoin is down by 0.5%, partially recovering from losses accumulated over the week, now totaling 6%. The record price set in mid-March is now a distant memory, and many observers are attempting to forecast BTC's next moves.
Expert Opinions on Bitcoin's Future Moves
Experts are showcasing their deductive skills, and influencers like LadyofCrypto have attempted short and medium-term predictions. For example, the analyst dedicated a post on X, formerly Twitter, to examine the various implications of the upcoming halving.
** So, what might happen to Bitcoin now?
Apart from the significant technical aspects, traders are eager to know about potential price movements. The analyst, in this regard, has considered Bitcoin's historical price trends.
Short-Term Volatility Expected
Short-term volatility is expected for Bitcoin, as historically, after a period of recovery, a decline closely follows the halving event. So far, in the two months leading up to the last two halvings, Bitcoin has seen a significant price increase, followed by a sharp decline one or two weeks before the event.
Analyzing recent events, it can be considered that the pre-halving rally has already occurred, so a more extensive correction could be imminent. In the past, the declines have been significant, 29.7% in 2016 and 20% in 2020. If history were to repeat itself, a similar movement might be imminent. Bitcoin usually shows a cautious reaction near the halving.
Will Altcoins Outperform Bitcoin?
Often, when analyzing the effects of halvings, observers mostly focus on Bitcoin, often overlooking overall market dynamics. However, interesting insights can be gleaned by observing the current market situation. For example, many data points emerge when considering the market capitalization of the top 125 cryptocurrencies, excluding Bitcoin.
So far, Bitcoin halvings have favored altcoin performance. After the 2016 halving, the market excluding BTC saw a 200% rally, matching the growth of the previous 20 weeks. A more moderate growth of 40%, but still significant, occurred after the 2020 halving.
LadyofCrypto notes that the top 30 altcoins seem to align with Bitcoin's trends, while mid-to-low market cap altcoins have sometimes recorded above-average price increases. In these cases, higher risk has also offered higher returns.
Altcoins offer intriguing opportunities in certain market phases, especially around Bitcoin halvings. So far, performances indicate the potential for significant gains from altcoins. Hence, the analyst shows a clear preference for altcoin investments in these particular market conditions.
Bitcoin Perspectives Based on Seasonality
Bitcoin has proven sensitive to seasonal variations and different times of the year. In particular, April has historically been a positive month.
Since the 2016 halving, in the following eight years, Bitcoin has seen a positive trend five times in April, benefiting the overall crypto market. This historical trend suggests that April can be considered a strong month for crypto. After the early-month decline, performance could be significant if historical trends are confirmed. In short, the outlook seems positive, especially considering that this year's halving will occur in April.
The typical push during this time of year, along with historically observed price dynamics around Bitcoin halvings, bodes well for future market growth.