The Bitcoin halving event concluded on April 20 without a significant impact on Bitcoin's value. This article explores what is next for Bitcoin, and if the effect of the halving is over.
Typically, a Bitcoin halving is a crucial event for the cryptocurrency and its traders, historically followed by substantial price increases. This time, the halving occurred on April 20th, with only a 5% BTC price increase preceding the event, leaving Bitcoin trapped within a bearish descending triangle pattern.
The muted price action post-halving has led to speculation about the end of the halving's effect. However, as seen in previous cycles, its impact requires time to develop. For example, in the 365 days following the 2012 halving, Bitcoin’s price gained an astonishing 8,069%, and in the 2016 halving, prices gained 284%. Similarly, after the 2020 halving, Bitcoin prices increased by 559%.
If we look at the average return in the 365 days following the 2016 and 2020 halving, it was roughly 421%. Projecting similar growth from today's price of around $66,000 per coin could suggest potential prices reaching as high as $258,000 per coin.
Of course, nothing in the crypto market is set in stone, and it's crucial to only trade with money you can afford to lose.
So why is this cycle different?
Today's cycle is unique, marked by an all-time high before the halving, dampening expectations for a significant rally. The reason is simple: many more were aware of the effect of the halving. The speculation on the launch of a spot Bitcoin ETF kickstarted the bull market in October 2023, and bitcoin prices have increased by more than 100% since then. Here at ThinkMarkets, we have repeatedly mentioned the halving as an event to focus on in the months heading into April 20.
Is the effect of the halving over?
If we use the stats mentioned above, then we are just at the start of the process. In addition, forecasts based on the stock-to-flow indicator developed by influencer Plan B predict that Bitcoin prices could reach roughly $500,000 by 2028.
This year’s Bitcoin halving event was also happening during a stock market correction. From its 2024 high, the Nasdaq 100 was down by 8% on Friday, the day before the halving event. In addition to the risks, the Middle East was moving closer to an outright war.
If we assume that the US economy continues to remain strong, as suggested by the latest data, and that Europe and China recover, then it is likely that stock markets turn higher, and with that, lifting the mood of crypto investors.
So what is next for BTC?
For now, BTC is stuck in a large descending triangle, and a breach of $59,156 could send prices to as low as $48,432. However, in your typical bull market, BTC will not lose more than 30%, and with that said, any downside should be limited to $52,000.
If the price remains above $59,156, BTC prices could creep higher and reach the upper part of the pattern at $71,500, with a break to this level lifting the price towards the pattern target of $86K.
So, what is the right step going forward? That depends on each trader's risk appetite and view. Some will aim to turn bullish on a retest of 59K, while others will wait for lower prices following a breach of the descending triangle (and possibly shorting on the way). Others will wait for strength and turn bullish on a breach to the upper end of the triangle.
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