Six months after the last bitcoin (BTC) halving, a milestone that was met last Saturday, October 19, the most interesting historical stage for the market begins. And yes, we are talking about the price of the main digital currency, which is currently trading around 67,000 dollars (USD).
Every halving that bitcoin has had in history has worked as a catalyst for its price. This is because this event, which occurs automatically every around four years, reduces the issuance of the currency by half.
Consequently, this implies less supply available to launch on the market by bitcoin miners, which facilitates the rise in the price due to the demand for the asset. In addition, the consecration of each halving has historically attracted new investors to become interested in the market due to its scarcity and limited issuance.
However, generally, The strong part of each bitcoin bull run has occurred between six and twelve months after the halving. Therefore, if this historical pattern repeats itself, the best for the price would be yet to come.
The exception to the rule is the first bitcoin halving, which occurred on November 28, 2012. By then, the currency was trading at USD 12, an amount that increased 1,000% in six months. Although this was a substantial increase, the following semester it repeated a similar percentage increase. This led it to then set a new record of USD 1,200.
On the other hand, for the second halving, which took place on July 9, 2016, the currency had a price of USD 660, which rose 36% in the following six months. This percentage was minimal compared to the following year, when it saw an increase of almost 2,000%. With this, it reached USD 19,000 as the peak of such an upward cycle.
As seen below, the third halving came on May 11, 2020, when bitcoin was trading at USD 8,700, a price that it increased 80% the first semester and almost 500% the next. That brought it to a price of USD 61,000 at the time, which, after a later drop, it surpassed after approximately one more semester, setting a record of USD 69,000.
The performance of the currency in each of these three events portends a strong bullish trend for bitcoin in the next six to twelve months approximately, especially considering the behavior seen in the last semester.
The current bitcoin cycle is stronger than previous ones
Currently six months after the fourth halving in bitcoin history, which occurred on April 19, 2024, the currency registers an increase of just 8% from the USD 63,000 it was trading at then. This behavior differs from the higher returns it showed in the first semester after previous halvings.
Although a priori this may seem like weakness compared to previous cycles, the truth is that it actually shows greater strength. This year, bitcoin surpassed the peak of the previous cycle before the halving, something that had never happened before in history. The launch in January of exchange-traded funds (ETFs) in the main economic power, the United States, motivated such a scenario.
Given this, bitcoin reached a new historical record of USD 73,700 in March, a month before the halving. And, since then it has remained in a consolidation stage in a wide range below, something typical after a strong rise, which seems to be close to ending.
In the last two months, the price has been recording higher lows and higher highs. This shows an upward trend that breaks with the opposite streak that was perceived in the previous months after the new record. This can be seen in the following graph.
Currently, it is trading at only 10% of its all-time high, which shows market strength staying close to such a mark. All it takes is a small boost in demand to overcome it.
Additionally, long periods where the price oscillates within a similar range, such as the last seven months, tend to break higher when it approaches resistance again. This last term refers to the zone of maximums, a product of greater supply than demand.
In this sense, for now, bitcoin shows everything necessary to repeat the pattern seen in the last two bull cycles: highest performance approximately six to twelve months after the halving.
The perfect fuel is loaded for the rise of bitcoin
Of course, it should be taken into account that each bullish cycle was not influenced merely by the valuation in the halving market. Different factors contributed to the increase in demand and this is no exception.
With growing demand from institutional investors through the new presence of ETFs in this cycle, bitcoin has been favored upwards. These instruments have seen capital inflows almost every week since their launch, as seen below.
Recent interest rate cuts in economic powers, such as the United States, have also increased liquidity. This is something that has motivated the bullish trend of bitcoin in the last two months, which leads to the break of the long period of consolidation.
The increase in liquidity in the economy has also driven major US stocks and even gold to reach new all-time high prices. Therefore, This could be a sign of seeing the same thing soon with bitcoinas soon as the appetite for diversification grows.
Added to this is that the United States presidential elections, scheduled for two weeks, predict more positive regulation for the cryptocurrency industry. As reported by CriptoNoticias, expectations are based on the fact that the main two candidates in dispute have shown their support for the ecosystem.
In any case, it should be noted that, if Donald Trump wins the elections, the price could benefit more, given that this candidate plans to maintain national reserves in bitcoin. In addition, he intends to fire Gary Gensler, president of the SEC, a securities regulator that has hindered the development of the industry.
With all this in consideration, A good time seems to be coming for the main digital currency and those who have it in their investment portfolio. However, the future is uncertain for any financial asset, so it is crucial to consider the risks before any trade.
Disclaimer: The views and opinions expressed in this article belong to its author and do not necessarily reflect those of CriptoNoticias. The author’s opinion is for informational purposes and under no circumstances constitutes an investment recommendation or financial advice.
