Bitcoin could go on an early bull market rally ahead of its fourth halving, historical charts reveal.Â
In the past week, the price of Bitcoin (BTC) has struggled to trade above the $43,000 mark, reaching as low as $41,700 within the period under consideration. However, the bearish price action could soon change course if historical charts are anything to go by.Â
Into The Cryptoverse CEO Benjamin Cowen recently shared a chart highlighting Bitcoin’s price action in past years, where the network has had supply halving. Historically, the leading cryptocurrency has rallied in the first two months of the halving year, a pattern that has occurred ahead of the past three halvings.Â
#Bitcoin early halving year pattern –
Bitcoin has always gone to the bull market support band (20W SMA and 21W EMA) in Jan/Feb of the halving year.
Will this time be different? pic.twitter.com/SgE2PjtCZ9
— Benjamin Cowen (@intocryptoverse) January 17, 2024
In the most recent halving year (2020), BTC saw a 25% increase between January and February, going from $7400 to above $10,000.
Although the growth was subsequently derailed by the massive COVID crash in March, Bitcoin bounced back in June en route to setting a new high in November 2021.
Will History Repeat Itself?
While historical performances do not guarantee future results, they provide a pattern for gauging market behavior toward key events. The pre-halving rallies are typically driven by positive market sentiment toward the impact of a cut to the amount of newly issued bitcoins.Â
Bitcoin’s upcoming halving, on track for April, will lower the issuance per block to 3.125 BTC, as opposed to the current issuance of 6.25 BTC. Around 900 bitcoins are mined daily, with the 2024 halving set to lower that supply to 450 bitcoins.
It remains to be seen whether market participants will react to the upcoming halving as they have in previous years. Notably, market sentiment flipped bearishly in the short term following the approval of spot Bitcoin ETFs in the United States.Â
However, April’s halving appears to be the next landmark on the horizon as Bitcoin enters the final two years of its current historic four-year cycle.
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