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Cryptocurrency News Articles

Bitcoin Enters 'Danger Zone' Ahead of Halving, Risk of Deeper Dip

Mar 22, 2024 at 07:55 pm

Cryptocurrency analyst Rekt Capital warns that Bitcoin (BTC) may experience a further decline before the halving event in May, citing historical trends of 20% to 40% corrections during similar periods. The trader notes similarities to the 2016 halving cycle, indicating a potential for a deeper dip before the event. Rekt Capital predicts the current bull market peak for Bitcoin could occur between November 2024 and February 2025, acknowledging the historical trend of longer intervals between peaks.

Bitcoin Enters 'Danger Zone' Ahead of Halving, Risk of Deeper Dip

Bitcoin's Pre-Halving Danger Zone: A Cautionary Tale

Is Bitcoin on the Verge of a Deeper Dip?

Crypto analyst Rekt Capital, boasting an impressive following of 433,000 on X, has sounded the alarm, warning that Bitcoin (BTC) may be poised for a further pullback ahead of next month's highly anticipated halving event. Historically, Bitcoin has experienced corrections ranging from 20% to 40% in the lead-up to such halving events.

Rekt Capital emphasizes that Bitcoin has officially entered a "danger zone," where the crypto king has historically retraced before halving events. This time window, approximately 14-28 days prior to the halving, has now opened. With just 26 days to go until the halving, Bitcoin has already retraced nearly 18% since last week.

Drawing Parallels to 2016: A Cautionary Tale

The analyst draws parallels between Bitcoin's current price pattern and the 2016 cycle, suggesting the possibility of a deeper dip before the halving. In 2016, Bitcoin initiated its pre-halving retrace approximately 28 days before the event, while in 2024, the retrace began around 32 days before. Notably, in 2016, Bitcoin's initial retrace produced a long downside wick before retracing further. This pattern is mirrored in the current price action, raising concerns about a similar fate.

Predicting Bitcoin's Bull Market Peak: When the Party Ends

Rekt Capital also ventures into the realm of predicting Bitcoin's potential peak in the current bull market cycle. Based on historical trends, Bitcoin tends to reach its bull market top 266-315 days after breaking its previous all-time high. Given that Bitcoin recently surpassed its previous highs, the analyst suggests the next peak may occur sometime between late November 2024 and late January 2025.

A Shifting Timeline: Bitcoin's Evolving Peaks

However, the analyst acknowledges that Bitcoin has historically taken longer to reach peaks in each cycle, which could push the peak of the current bull market to December 2024 or mid-February 2025. This extended timeline is attributed to the increasing number of days Bitcoin spends beyond its old all-time highs.

Bitcoin's Current State: A Technical Perspective

At the time of writing, Bitcoin trades at $65,410, having lost over 3% in the past 24 hours. This recent dip underscores the analyst's cautionary stance, highlighting the potential for further downside before the halving event.

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Other articles published on Oct 30, 2024