In a recent video, cryptocurrency analyst Rekt Capital warns its 74,300 YouTube subscribers that bitcoin may soon experience another decline. He draws parallels with the price developments around the 2016 ‘halving’. Which price points should we keep an eye on?
Bitcoin price price corrections around the halving
Rekt Capital explains that the bitcoin price usually undergoes significant price corrections around the halvings. These are events that happen every four years and where the reward for mining bitcoin is halved. His analysis shows that these corrections usually come in two waves: one before and one after the halving.
For example, in 2016, bitcoin had a large price drop 28 days before the halving, which Rekt Capital describes as a pre-halving danger zone. But this was not the end of the volatility. After the halving there was a second danger zone with further declines. “If you look at these halving withdrawals, a small portion of them are happening before the halving. But the majority of these pullbacks and consolidation periods occur after the halving,” he clarifies.
Critical support zone around $60,000 for bitcoin
Currently, the price of bitcoin is hovering around $60,000, which Rekt Capital identifies as a crucial support zone. Whether this level holds over the next two weeks could be crucial for bitcoin’s short-term market sentiment.
He states: “It’s about the next two weeks, these two crucial weeks. Can we linger around the lower limit here? [rond $60.000]? And if we can do that in the next two weeks, that will give us a fair degree of confidence that maybe, just maybe, this reaccumulation lower bound will hold.”
The analyst further indicates that, based on 2016 patterns, the current post-halving danger zone is likely to persist until next month. Since the recent halving took place last week, Bitcoin could be in this volatile phase for a little more than two weeks, according to the historical data he cited.
