Bitcoin Approaches Risky Territory As Halving Event Draws Near

Godspower Owie

Last Updated: June 11, 2024 6:52 am

3 mins read

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The price of Bitcoin has been on a downward trend since it reached a new all-time of $73,000, ushering in a wave of speculations regarding the crypto asset’s next direction in the short term.

In the past few days, Bitcoin’s recent dip has triggered a general crypto market retracement. With the Bitcoin Halving event fast approaching, many crypto analysts are anticipating a further decline in BTC’s price in the near future.

Bitcoin Poised For “Danger Zone” Ahead Of Halving Event

Popular cryptocurrency trader and analyst Rekt Capital has shared a gloomy prediction for Bitcoin with the crypto community on the social media platform X. His forecast examines BTC’s potential to drop even further prior to the halving event while noting the entrance to a risky area he dubbed the “Danger Zone.”

The analyst’s forecast came in light of BTC experiencing a notable decline in the past few days. According to the expert, two days from now, Bitcoin will formally venture into the danger Zone (orange).

This is the starting area of past retracements seen ahead of the BTC Halving, which is expected to take place in April. Prior to the halving, these retracements have constantly indicated intervals of substantial market corrections for the digital asset.

Rekt Capital further pointed out that the pre-halving retracements have historically been observed in BTC 14-28 days before the event. Bitcoin’s price witnessed a pullback of about 40% in advance of the 2016 halving occurrence.

Meanwhile, in 2020, the crypto asset fell by over 40% before the occasion. Presently, we are less than 30 days before this year’s BTC halving takes place; however, the price of the coin has declined by over 11% in the past week, suggesting further correction in the coming weeks.

The post read:

In 2 days, Bitcoin will officially enter the “Danger Zone” (orange) where historical Pre-Halving Retraces have begun. Historically, Bitcoin has performed Pre-Halving Retraces 14-28 days before the Halving. In 2020, this retrace was -20% deep, and in 2016, this retrace was -40% deep. Currently, BTC is 30 days away from the Halving and has pulled back -11% this week.

It is noteworthy that the crypto analyst had previously pinpointed the timeframe BTC is expected to top out in this bull cycle. Rekt Capital believes the asset will peak within 280-350 days. Specifically, this could occur around mid-December this year, or in mid-February of next year.

4 Distinct Halving Phases

So far, the crypto analyst has highlighted several different phases for the upcoming Bitcoin Halving; these include the Pre-Halving Rally, Final Pre-Halving Retrace, Re-accumulation, and Parabolic uptrend.

According to Rekt Capital, there usually is a pre-halving rally approximately 60 days before the event takes place. For the final pre-halving retrace, it usually develops around 14 to 28 days ahead.

Furthermore, after the Pre-Halving pullback, a multi-month re-accumulation period follows. Lastly, the parabolic uptrend begins once Bitcoin exits the area of re-accumulation.

Featured image from iStock, chart from Tradingview.com

Godspower Owie

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