Bitcoin is currently ~120 days away from its Halving in 2024.
In this article, I’ll cover the 5 phases of Bitcoin Halving.
This analysis goes back to 2015 to provide historical context all the way to 2023, heading into the highly anticipated Bitcoin Halving in 2024.
Let’s get into it!
Bitcoin Halving in 2015
1. Pre-Halving Period (orange)
At this very same point in the cycle (~120 days prior to the 2016 Halving), Bitcoin was only just beginning a new move upwards inside its established Re-Accumulation Range (green-red).
Bitcoin was already halfway through its Re-Accumulaton at this same point in the cycle.
This Pre-Halving Re-Accumulation lasted until two months before the July 2016 Halving.
This is when Bitcoin performed its Pre-Halving Rally.
2. Pre-Halving Rally (light blue)
Bitcoin finally broke out from its Pre-Halving Re-Accumulation to form a new Pre-Halving Local Top of ~$776 (light blue box).
3. Pre-Halving Retrace (dark blue circle)
Just before the Halving, Bitcoin experienced a -40% retrace to form a new Post-Halving Re-Accumulation Range ($566 - $776).
4. Post-Halving Re-Accumulation (red)
This Post-Halving consolidation (red box) lasted for 6 months until Bitcoin finally broke out from its Post-Halving Re-Accumulation Range in December 2016.
5. Post-Halving Parabolic Uptrend (green)
After breaking out from its Post-Halving Re-Accumulation Range...
Bitcoin pulled back to retest the top of said Re-Accumulation Range as new support.
This retest was successful, fully confirming the breakout to enter the Parabolic Phase of the Bull Market (green).
Bitcoin Halving in 2019
1. Pre-Halving Period (orange)
At this very same point in the cycle (~120 days prior to the 2016 Halving), Bitcoin broke out into a +41% move to the upside.
However, this was rally figured as relief as it formed a new Lower High resistance (black) and retrace -63% afterwards due to the Black Swan COVID-19 crash.
During this crash, Bitcoin formed a Macro Higher Low (black), downside wicking considerably below it, but Weekly Candle Closing above it
During this Pre-Halving period, there were multiple opportunities for both downside retracements and upside relief rallies
This Pre-Halving volatility lasted until two months before the May 2020 Halving.
Just two months before the Halving is when Bitcoin performed its Pre-Halving Rally.
2. Pre-Halving Rally (light blue)
After bottoming at the Macro Higher Low (black), Bitcoin experienced an almost uninterrupted uptrend to reach the very same Pre-COVID highs
3. Pre-Halving Retrace (dark blue circle)
Just before the Halving, Bitcoin experienced an almost -20% Pre-Halving retrace
4. Post-Halving Re-Accumulation (red)
After the Pre-Halving retrace, Bitcoin consolidated for 10 weeks before finally breaking out to revisit the 2019 highs
Bitcoin rejected -21% from this resistance.
However, on this revisit, the resistance was significantly weakened and couldn’t reject the price for much longer
5. Post-Halving Parabolic Uptrend (green)
Bitcoin finally broke beyond the 2019 resistance (red) to enter the Parabolic Phase of the Bitcoin Bull Market.
Bitcoin Halving in 2023
1. Pre-Halving Period (orange)
At this very same point in the halving cycle (~120 days before the Halving), Bitcoin was beginning its uptrending move within its Re-Accumulation range in 2016 whereas in 2019 BTC had broken out into what would become a +41% move to form a new Lower High.
This 2023 however, Bitcoin has done something completely different, having enjoyed an uptrend for multiple weeks without much of a correction.
Should a retrace occur from current price levels, it would likely constitute one of the last bargain-buying opportunities for Bitcoin before the Halving event.
There is the ETF catalyst in January which could prompt a “Buy the Hype, Sell the News” event. Could this prompt one last retrace in the Pre-Halving period?
And after such a retrace is complete, should it even occur, a Pre-Halving rally would begin around two months before the April 2024 Halving.
2. Pre-Halving Rally (light blue)
If a retrace indeed occurs soon, the reversal that occurs at the bottom of that retrace would mark the beginning of the Pre-Halving rally.
For a Pre-Halving rally to take place, it needs to originate after a retrace - which is why there is scope for a retracement in the Pre-Halving period still.
And a Local Top just before the Halving would occur to transition into the Pre-Halving retrace.
3. Pre-Halving Retrace (dark blue circle)
In 2016, Bitcoin had experienced a deep -40% Pre-Halving retrace whereas in 2020 this Pre-Halving retrace was much shallower at -20%.
It really depends where Bitcoin Local Tops prior to its Halving in 2024.
And then a -20% to -40% would be possible from that Local Top.
4. Post-Halving Re-Accumulation (red)
After the Pre-Halving retrace, Bitcoin could consolidate for several weeks around the highs.
If 2019 were to repeat, then a -21% Post-Halving retrace could be on the cards.
But generally, this consolidation would constitute Post-Halving Re-Accumulation in preparation for finally breaking out into a new parabolic uptrend.
5. Post-Halving Parabolic Uptrend (green)
Bitcoin finally broke beyond the 2023 Local Top resistance (red) to enter the Parabolic Phase of the Bitcoin Bull Market.
Let’s also keep these 5 phases in mind:
In summary:
Historical data shows Bitcoin's price tends to follow a pattern around Halving events, with phases of re-accumulation, rallies, retraces, and parabolic uptrends.
Bitcoin follows a pattern around Halving: re-accumulation, rallies, retraces, and parabolic uptrends.
Pre-halving retraces of -20% to -40% can occur shortly before the Halving event.
Pre-halving retraces tend to precede Post-Halving re-accumulations and then later parabolic uptrends.
Post-halving, re-accumulation may occur before a new parabolic uptrend.
Current resistance is crucial, mirroring past pre-halving price actions.
As we continue to observe what unfolds for Bitcoin’s Halving, consider subscribing to my newsletter for level-headed insights and trading advice.
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That’s it for now - stay informed, stay rational, and happy trading! 🙂
Rekt Capital