Bitcoin is up 80% since the beginning of the year. Past data shows that the coin will enter a bull market when it is close to the halving time.

Bitcoin is nearly a year away from undergoing a major halving event, which could catalyze a rally in the coin. The next halving is expected to take place in April or May 2024.

Bitcoin price rises before and after halving

Bitcoin has risen amid much volatility over the past few weeks, fueled by concerns that the U.S. Federal Reserve may cut interest rates, slow economic growth and tighter credit conditions, as well as recent events in the banking sector.

According to data from CoinGecko, Bitcoin has climbed to around $30,000 mid-week, up more than 80% from the beginning of the year.

Vijay Ayyar, vice president of corporate and international development at Luno cryptocurrency exchange, said bitcoin’s move above $30,000 amid bank failures and economic turmoil showed a cyclical “bottom” and that a bitcoin cycle was forming.

In the next halving cycle, miner rewards will be reduced to 3,125 bitcoins.

  • According to CCData, the most recent halving occurred on May 11, 2020, and the price of Bitcoin rose 19% in the previous 12 months, from $7,191.36 to $8,568.88.

  • The last halving took place on July 9, 2016, and the price of Bitcoin rose 142% in the 12 months prior, from $269.14 to $651.83.

  • The first halving occurred on November 28, 2012, and according to CCData, the price of Bitcoin rose 384% from $2.55 to $12.35.

  • “In the past, the accumulation period from the breakout of the market bottom to the halving date lasted at least 500 days.”

  • Sly added: “That is, assuming the market bottom of this cycle was in November last year (when Bitcoin fell to a low of $15,760), the current cycle is only 142 days long. This coincides with the expected date of the next Bitcoin halving, which is 378 days away.”

Additionally, Bitcoin prices tend to rise in the months following a halving.

  • Specifically, in the following 546 days after the halving on May 11, 2020, Bitcoin rose 688.31%, reaching a peak of $67,549.14 on November 8, 2021, according to CCData.

  • During the last halving (July 9, 2016), the Bitcoin price increased by 2,824%, reaching a peak of $19,065.71 in mid-December 2017.

Market movement is cyclical

According to PlanB, a well-known analyst, Bitcoin will reach $50,000-60,000 during the upcoming halving period.

Recently, PlanB released the latest long-term chart “Bitcoin Market Phases”.

The main conclusion of “Bitcoin Market Phases” is that Bitcoin has entered a new bull market in early 2023. As PlanB explained in a YouTube video (here), this new model is based on only one on-chain variable. But he did not reveal what indicator he was referring to.

The analyst then added that “Bitcoin Market Stages” is not a forecasting or pricing model (like Stock-to-Flow). Its sole purpose is to try to estimate the market cycle stage that Bitcoin is in. PlanB highlighted the advantages of the new model as follows:

The basic premise of “Bitcoin Market Phases” is that every market (including cryptocurrencies and Bitcoin) is cyclical. Furthermore, these cycles are based on mathematics and fractal similarities, which are nothing more than quantitative descriptions of human psychology.

The analyst believes that “the sentiment associated with the cycle stage can show you something completely different. Therefore, it is very important to understand what cycle stage you are in.” Therefore, the purpose of the “Bitcoin Market Stages” chart is to help PlanB followers know that the market often shows very different things than our emotions do.

In addition to presenting the new chart, PlanB also discussed the famous S2F update he wrote. This model is based on past halvings.

PlanB explained: “Halving causes the scarcity of Bitcoin to increase. Therefore, the market value of Bitcoin is expected to increase between halvings.”

Interestingly, the famous analyst has created at least three versions of S2F over the years. The model was initially introduced in 2019 and is based on the monthly valuation of Bitcoin and the scarcity created by the subsequent halving. In this model, the current Bitcoin price is estimated at $55,000.

The other two models are the annual S2F and the so-called stock-to-flow cross-asset model (S2FX). In the first way, the average price of Bitcoin in the current cycle should be $100,000. According to the second model, Bitcoin must reach $288,000. Although these predictions differ greatly from the current price of Bitcoin, PlanB said:

“I still think the S2FX model based on gold and silver is fundamentally the best value model.”

However, he then added that the original S2F model is currently the most accurate. It predicts an average price of $55,000 for Bitcoin in the current cycle.

Analysts assume that in the future Bitcoin will be twice as scarce as gold. If this happens at some point, Bitcoin's market value will also exceed gold. As of now, gold's market value is about $10 trillion, and Bitcoin's market value is about 1/20 of gold.

PlanB pointed out that the current Bitcoin price is reversing and approaching the value set by its model. He added that every time a halving occurs, the Bitcoin price reaches exactly the value set by the original stock-to-flow model. The sign of the halving is that the color of the dot changes from blue to red.

If this happens again during the upcoming halving, Bitcoin will be closer to the $55,000 to $60,000 range. This would equate to a roughly 100% increase in Bitcoin from today’s valuation.

According to the latest forecasts, the next halving will take place on April 5, 2024. This means that Bitcoin must increase by about $30,000 in 12 months. Therefore, the average monthly gain of this cryptocurrency should be $2,500.

#BTC#crypto2023#ETH#Binance#Web3 #eth2.0 #original