Next Crypto Bull Run and Bitcoin Halving

Muhammad Naeem

Blogger

Bitcoin price moves in recurring patterns of highs and lows and these price patterns are called Bitcoin market cycles. Each Bitcoin market cycle is 39 to 46 months long and during this period Bitcoin records a local low and a new all-time high. Since the Bitcoin halving period is almost the same as Bitcoin Price cycles, it is considered that Bitcoin halving plays a key role in those cycles. Bitcoin halving is divided into many phases and each phase has a history of overcoming and controlling the price movements of Bitcoin and ultimately the entire crypto market. The altcoins might show a different behavior due to some specific events like the Hard or Soft Fork of a coin.

Bitcoin halving means 50% depreciation in the miners’ fees or rewards they receive for providing computational power to validate crypto transactions. After every 4 years, this reward for mining bitcoin is cut in half. Now that another Bitcoin Halving is approaching in April 2024, it is expected to influence the price of Bitcoin and complete the Bitcoin market cycle.

5 Phases of Bitcoin Halving:

Approximately we are 5 months away from Bitcoin Halving in 2024 and this is the time when the halving period starts to impact the price and funds flow in and out of Bitcoin. There are precisely 5 phases of Bitcoin Halving:

Pre-Halving period

We are in pre halving period now and this is where only diamond hands get in. The Price of Bitcoin after this phase slightly drops and usually paper hands would sell off their holdings. Buyers in this phase get the maximum Return on Investment ROI. Bear in mind that, as soon as this phase ends, the price drops but this bearish rally is considered temporary followed by a strong bullish wave.

Pre-Halving Rally

In the Pre-Halving Rally Phase, the halving hasn’t started yet, and the impact of it starts to appear in the bullish candle form. This period of Bitcoin halving starts in February 2023, nearly 60 days prior to the halving event.

This period is termed as “Buy the Hype” by crypto investors however, this is not the actual bull run of the Bitcoin halving or Bitcoin market cycles. This period lasts 63 days in the last Bitcoin Halving event and it is shown in the above chart in the blue area.

Pre-Halving Retraces

Due to an increase in buying pressure, the price of bitcoin enters an overbought situation and that’s when Pre-halving retraces start. These retraces (red area) mean paper hands are trying to cash out their profits. In 2016, these retraces were as deep as 38%. Since halving occurs in this phase, many analysts use these retraces to debate that Halving is not a bullish price catalyst – and they may be wrong.

Re-Accumulation

This same retrace zone turns into an accumulation zone (red area) as new buyers enter the trade due to positive sentiments and technical indicators. This accumulation period may be months long but it’s the quiet before the storm. After this multi-month accumulation zone, the price of Bitcoin finally enters the last and final phase.

Parabolic Uptrend

After a positive breakout from this support and resistance play of the accumulation zone, the price of Bitcoin shoots to its all-time high in the Bitcoin Price Cycle (Green Area). This uptrend uses Bitcoin Halving, indicators, and price history as a bullish catalyst to pump the price of Bitcoin and alts both to new highs.

This is where the impact of Bitcoin halving ends but the The Bitcoin price Cycle is still at play.

The phases of the Bitcoin Price Cycle:

Just like the Bitcoin halving, the price of Bitcoin also goes through a cycle of highs and lows called the Bitcoin Market Cycle. Each cycle is 4 years long and has higher lows and higher highs recording a new all-time high every time.

What are these phases of the Bitcoin Market Cycle and how do they are impacted by Bitcoin Halving? Let’s try to break it down and answer these questions.

Accumulation

The accumulation phase of Bitcoin tests both investors and traders as the direction of Bitcoin price is unclear and there’s not enough volatility. The investors don’t invest at this moment in hopes of another dip and getting a better buying rate. Likewise, since the price is not moving much, retail traders prefer altcoins with low marketcap.

The accumulation phase accumulates money to build the base for a bullish wave. Investors and blockchain companies jump in with their funds. The price moves sideways with negligible signs of upward movement. This phase can last up to several months and offers the best ROI to the investors.

Breakout

In this phase of the Bitcoin market cycle, the price of Bitcoin starts to break above the resistances and record local highs. Due to bullish sentiments in the market, more traders and investors jump in with fresh cash inflow and the price of Bitcoin eventually enters a parabolic region.

Parabolic

This is where bulls rule! The Parabolic phase in the Bitcoin The price Cycle is considered a zone of major gains and green bullish candles. This zone appears nearly after 1 year of Bitcoin halving and lasts as long as the bearish phase.

Correction

In this phase of the Bitcoin Price Cycle, the price of Bitcoin and almost all altcoins start to dwindle and reach a local low of the cycle. Most of the top Blockchain projects were developed in the bearish season. This is when the crypto winter starts and lasts up to 25 to 30 months. We are in the correction region now which is going to shift to the accumulation zone after Bitcoin halving in April 2024.

Key Takeaway:

Bitcoin Halving impacts the price cycles of Bitcoin and acts as a catalyst to pump the price. Both events are correlated and due to the “Buy the Hype” slogan coined by traders, Bitcoin price records a new high every time. Is Bitcoin going to repeat the cycle this time, or will there be a disruption? Let the time decide this.