The Bitcoin Halving, a highly anticipated event that occurs approximately every four years, has recently taken place. This event, which reduces the block reward for miners by half, has historically been followed by significant price appreciation and market activity.
In this article, we will explore the three phases of the Bitcoin Halving cycle, as outlined by renowned crypto analyst Rekt Capital, and discuss what investors can expect in the coming weeks and months.
What you'll learn 👉
Phase 1: Final Pre-Halving Retrace
The first phase of the Bitcoin Halving cycle is characterized by the Final Pre-Halving Retrace. In this current cycle, Bitcoin experienced two such retraces: an 18% pullback in March and another 18% pullback in April. Historically, the Pre-Halving Retrace has been more severe, with a 38% decline in 2016 and a 19% decline in 2020.
This Pre-Halving Retrace represents the final bargain-buying opportunity before the Halving event. With the Bitcoin Halving occurring five days ago, this opportunity has now passed, and the Pre-Halving Retrace is officially over. However, the purpose of this retrace is to develop a foundation for the next phase: Re-Accumulation.
Phase 2: Re-Accumulation Range
The second phase of the Bitcoin Halving cycle is the Re-Accumulation Range. This range begins to form a few weeks before the Halving but primarily develops after the event has taken place. During this phase, Bitcoin is expected to move sideways, allowing the market to cool off after the impressive pre-Halving price performance.
The Re-Accumulation Range can last for several weeks, and in some cases, up to 150 days (approximately five months). Many investors may experience feelings of boredom, impatience, and disappointment during this phase, as the lack of significant price appreciation in the immediate aftermath of the Halving can be discouraging. As a result, some investors may be shaken out of their positions during this stage.
However, it is essential to recognize that the Re-Accumulation Range is a natural and necessary part of the Bitcoin Halving cycle. This phase allows the market to consolidate and build a strong foundation before the next major move higher.
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Show more +Phase 3: Parabolic Uptrend
The third and final phase of the Bitcoin Halving cycle is the Parabolic Uptrend. This phase begins when Bitcoin breaks out from the Re-Accumulation Range and enters a period of accelerated growth. Historically, this phase has lasted just over a year (approximately 385 days), during which Bitcoin experiences a parabolic price increase.
However, Rekt Capital notes that the current market cycle may be an Accelerated Cycle, meaning that the duration of the Parabolic Uptrend could be cut in half. If this proves to be the case, investors could see Bitcoin reach new all-time highs and experience significant price appreciation in a shorter timeframe than in previous Halving cycles.
Understanding the three phases of the Bitcoin Halving cycle is crucial for investors. With the Final Pre-Halving Retrace now complete, Bitcoin has entered the Re-Accumulation Range, a period characterized by sideways price action and consolidation.
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