A Decade of Highs: Bitcoin Halving's 10-Day Countdown 2024

With the Bitcoin halving only ten days away, anticipation is building and media coverage is sure to increase.  Key questions reviewed are:

• What does history indicate for the future of Bitcoin after the halving?
• How does Bitcoin pre-halving price movement compare to the prior two halvings in 2016 and 2020?
• Will the Bitcoin halving turn into a “Sell the News” event?
• Crypto continues to have a postive trend

The Bitcoin Halving Years

Significant price increases have occurred prior to and following Bitcoin halvings. Specifically, one year before the 2016 halving, Bitcoin achieved a 1011% increase until its peak on April 14, 2021. Four years later, Bitcoin increased by 795% from May 11, 2019, to April 24, 2021. Historically, Bitcoin achieves most of its gains in the two-year period surrounding the halving and tends to underperform during the other two years of the four-year cycle.

With only 10 days until the next Bitcoin halving, the upcoming year could be highly favorable based on historical patterns.

Bitcoin Halving Price Comparison

The following chart shows the price performance of the current Bitcoin Halving setup 10 days prior to the halving and the halving setup 10 days prior to 2016 and 2020. Significant is how similar the 2016 price performance is to the 2024 price setup. While the 2020 price setup is not the same, a key point is the Covid market crash occurred. 

Comparing the post Bitcoin halving performance shows significant gain occur in the 3 to 9 month period after the halving occurs not at the actual time of the halving.

Will the Bitcoin Halving turn into a “Sell the News Event” ?

In the stock market, there are many significant new events that often lead to significant selloffs. Often, you hear the phrase “Buy the rumor and sell the news” associated with stocks. This means that the buildup to these events is when significant increases occur. After the news is out, there will not be another significant news event in the short term that will be as impactful, so this often leads to a selloff.

However, that is for stocks, not for crypto. There are many stock indicators that work great for stocks but completely fail when it comes to crypto. Many feel the reason for this is crypto whales. Crypto whales track the metrics professional stock traders use and will often set up market conditions contrary to what a stock professional may expect, leading to liquidations of hedged positions. A key example of this is the “Death Cross,” when the 50-day moving average crosses under the 200-day moving average. Many stock professionals have made significant amounts of money shorting stocks when a death cross occurs for a stock.

When Bitcoin “Death Crosses” have occurred in the past, instead of Bitcoin going down in price, there is a history of significant price increases when Bitcoin death crosses occur. A big reason for this is the hedged positions put into place before Bitcoin death crosses occur, leading to a trader being forced to trade buyback when the liquidation to the hedge position occurs.

So, getting back to the halving, the possibility is there that a short-term trend may occur before the halving with the possibility of some traders being on the wrong side of a trade expecting a “sell the news” type of play.

Key Bitcoin Halving Points:

• Comparing today’s price, 10 days before the Bitcoin Halving, shows a similar price increase (161%) has occurred up to this point as in 2016 (170%).
• Noteworthy is the under performance from 2020, a key reason for this could be the overall Covid market asset crash that occurred in March 2020 due to significant fears and concerns. Bitcoin would reach a low of $4,000 on March 12^th.
• Comparing the 1 year prior to the post halving price peaks show a similar result for both 2016 and 2020.
• Due to the much larger market cap, liquidity, and trading volume today, it will be challenging to achieve similar exorbitant gains on a percentage basis. However, price history does show that a significant gain may occur.
• Many metrics used for stock price predictions often do not work for Cryptocurrencies.

Meanwhile, trading continues and March was another good month for crypto

As the crypto chart at the beginning of this article shows, in March the average cryptocurrency was up 24%, this comes after the average crypto was up 31% in February.

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