Rekt Capital suggests the possibility of a 40% drop in Bitcoin’s value leading up to its upcoming halving event. Drawing information from historical cycles, the analyst points out that such retracements have occurred in the past, typically around 60 days before the halving.
The current focus is on the pre-halving period, which spans the next 42 days. This phase historically sees a rally following a retracement in Bitcoin’s price. The analyst highlights the pattern of retracement, rally, and retrace during this period, saying hat it sets the stage for a subsequent surge to new all-time highs after a reaccumulation period.
Comparing previous cycles, the analyst notes that retracements can vary, citing examples of an 18% drop in the 2015-2016 period and a 40% retracement in 2016. The recent 20% retracement in 2020 is also mentioned, with the caveat that it was influenced by external factors like the global pandemic.
He also explained the importance of the orange moving average during pre-halving years, showcasing historical trends where it acts as a reliable support. The current value of this moving average is approximately $36,000. It is suggested that, in 2024, any potential dip in Bitcoin’s price may see a retest of this level.
Additionally, the green 350-day moving average, representing $60,000 at the moment, is highlighted as a reference point. Historical data shows that revisiting this green moving average during the halving year may lead to a rejection.
The analysis underlines the uncertainty surrounding potential retracement percentages, with a reminder that emotional factors, especially during the halving event, can impact market dynamics. The upcoming 40 days are deemed crucial, with the possibility of a retracement setting the stage for a pre-halving rally.
Source: https://coinpedia.org/news/analyst-says-bitcoin-may-soon-crash-40-whats-next-for-bitcoin/