BTC - Pre-Halving Correction?
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Spot ETF (demand increase) + Halving (supply decrease) = Price Increases..... eventually
It's no secret that the spot ETF launch didnt go exactly to plan. GBTC dumped into the liquidity and the OTC buying meant price stalled and it quickly, on the surface, started to look like a bit of a non-event.
Now we, as cool guys who have a glassnode subscription, all know the spot ETFs are actually bullish AF. Inflows are astronomical and once the GBTC sell volume is exhausted we'll see price find its true level. However I'd be lying if I said that we anticipated the Greyscae sell off, I dont think anybody did.
With the halving approaching lets not be unprepared again.
Back in July 2016 the halving was preceded by a 30% dump with the supply dynamics not positively affecting price until October. 8 months later we had seen a 100% price increase.
The last halving took place in May 2020 when the world was locked down and, as anyone who traded through it will tell you, it was a wild time. After the initial market shock of Covid, Bitcoin responded dramatically and the upcoming halving was seen as a huge investment opportunity for a whole new generation of home taught retail traders.
Ultimately those traders were right, on May 1st 2020 BTC was $8,800 by May 1st 2021 BTC was $56,300, but when the halving hit on 11th May it didnt feel like it.
In the days immediatley prior to the halving price dumped 20%. It recovered those losses by the 14th and within 6 months had gained doubled on route to its ATH in Nov '21.
Expect similar this time out.
The pattern seems to be;
1 - Defined rally into the halving
2 - Brief correction
3 - Consolidation before the major bull run (peaking around 18 months later)
We will very likely see a correction of 10-30% in the immediate days before the halving so if you are going in leveraged be very careful.
I'd speculate that maybe the correction is linked to Miners, generating capital prior to the halving to cover expenses and secure cash flow ahead of a period where output is halved a long time before their incomes double.
TL;DR dont expect a rocket ship on the day of the halving, historically price corrects on the halving before the positive effects are felt.
It's no secret that the spot ETF launch didnt go exactly to plan. GBTC dumped into the liquidity and the OTC buying meant price stalled and it quickly, on the surface, started to look like a bit of a non-event.
Now we, as cool guys who have a glassnode subscription, all know the spot ETFs are actually bullish AF. Inflows are astronomical and once the GBTC sell volume is exhausted we'll see price find its true level. However I'd be lying if I said that we anticipated the Greyscae sell off, I dont think anybody did.
With the halving approaching lets not be unprepared again.
Back in July 2016 the halving was preceded by a 30% dump with the supply dynamics not positively affecting price until October. 8 months later we had seen a 100% price increase.
The last halving took place in May 2020 when the world was locked down and, as anyone who traded through it will tell you, it was a wild time. After the initial market shock of Covid, Bitcoin responded dramatically and the upcoming halving was seen as a huge investment opportunity for a whole new generation of home taught retail traders.
Ultimately those traders were right, on May 1st 2020 BTC was $8,800 by May 1st 2021 BTC was $56,300, but when the halving hit on 11th May it didnt feel like it.
In the days immediatley prior to the halving price dumped 20%. It recovered those losses by the 14th and within 6 months had gained doubled on route to its ATH in Nov '21.
Expect similar this time out.
The pattern seems to be;
1 - Defined rally into the halving
2 - Brief correction
3 - Consolidation before the major bull run (peaking around 18 months later)
We will very likely see a correction of 10-30% in the immediate days before the halving so if you are going in leveraged be very careful.
I'd speculate that maybe the correction is linked to Miners, generating capital prior to the halving to cover expenses and secure cash flow ahead of a period where output is halved a long time before their incomes double.
TL;DR dont expect a rocket ship on the day of the halving, historically price corrects on the halving before the positive effects are felt.
Note
15% down currently, think there's a deeper correction coming?
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