Bitcoin remains under pressure at writing and is within a bearish formation following heavy losses on March 19. As prices plummet, an X analyst he thinks This pullback is in line with historical performance, especially as the network prepares to reduce miner rewards in April 2024.
Bitcoin pullback similar to cooldown before 2020 halving
Based on analyst assessment, BTC is currently down around 18% from its recent high. This pullback is on par with the approximate 19% decline seen before the previous halving event in 2020.
It is important to note that Bitcoin has historically corrected lower after recording new highs before the halving. The coin subsequently reached new all-time highs following the halving, driven by a decrease in supply. This cycle, BTC reached a new all-time high of $73,800 in the first two weeks of March before cooling to the spot rate, a departure from the usual trend.
As the Bitcoin network prepares for the halving event in mid-April 2024, it is crucial to note the potential market implications. Some market observers speculate that the current decline could offer inflows for investors looking to accumulate at a lower price in anticipation of future price gains.
From the Bitcoin candlestick arrangement on the daily chart, the path of least resistance appears to the south. Specifically, after the drop on March 19, the coin remains in a bearish breakout pattern, encountering strong rejections at the middle of the Bollinger Band (BB) or the 20-day moving average. BB is a technical indicator to measure volatility.
Will the Federal Reserve revive demand for BTC?
Currently, Bitcoin is stable. Even so, only time will tell if prices will recover, surpassing the $70,000 level in the days leading up to the halving event in less than a month. Further losses in spot rates mean that the drop before the halving and after the recovery before the halving was much steeper than in 2020.
As history clearly shows, halving is an important event in Bitcoin. It has repeatedly proven to be a major price catalyst for Bitcoin, as seen in the last bull cycle when prices rose to around $70,000.
Consequently, the coming days will shape Bitcoin price developments in the medium and long term. One of the main drivers of crypto and BTC valuation will be fundamental events, especially pronouncements from the United States Federal Reserve (Fed). The central bank will transmit its interest rate decision on March 20. In early 2022, when interest rates rose, prices plummeted.
DALLE Featured Image, Chart from TradingView
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