Bitcoin is now 86% complete with its halving process. Here’s what the last two cycles looked like at the same point in their lifecycles.
Bitcoin’s next halving now at 86%
In a post on X, BTC cycle analyst Root released an update on the cryptocurrency’s halving progress. The “halving” is a periodic event on the Bitcoin blockchain where the asset’s block reward is cut in half.
The "block reward" here refers to the reward that miners receive for solving blocks on the network. These rewards are the only way to mint new Bitcoins, so the rate at which miners solve blocks can be thought of as the productivity of the asset.
The reason halvings exist is to keep the rate of production from falling over time. Without halvings, Bitcoin supply would continue to grow at a constant rate indefinitely, potentially causing the asset’s price to take a hit as supply and demand dynamics tend to shift.
With halvings, Bitcoin’s inflation remains in check, and the asset becomes more scarce with these events (which occur approximately every four years). Because halvings are such significant events, many experts use them to define what constitutes a Bitcoin “cycle.”
Here’s a chart shared by the analyst showing the progress towards the asset’s next halving event, as well as what previous cycles looked like at the same stage as now:
As shown in the chart above, Bitcoin has completed about 86% of its current cycle when Root published the data. At the same time, the asset price has reached or is close to the local high point in the past two cycles.
In the cycle between Bitcoin’s first and second halvings, the price fell after peaking, but quickly gained a foothold and returned to the overall upward track.
However, the cycle between the 2nd and 3rd halvings saw a more significant drop in the coin, and the upward trend did not resume until the end of the cycle. But it is worth noting that the outbreak of COVID-19 caused a sharp crash in cryptocurrencies, which may have contributed to the asset’s deviation.
It now remains to be seen what path Bitcoin will take as next year’s halving approaches. However, this year’s rally has some similarities to the April 2019 rally, which could mean that the cryptocurrency is more likely to follow the lead of the previous cycle.
Bitcoin Price
Bitcoin has been hovering below the $28,000 mark for the past few days, but the asset seems to have slipped today as its price is currently hovering around $27,500.
