The Bitcoin halving is the catalyst that attracts many eyes to the crypto world.
Historically, it has always produced a bull run after this event.
Here is my analysis of the Bitcoin cycles, what to potentially expect + a bonus comparison that will surprise you.
1/20π§΅π
Historically, it has always produced a bull run after this event.
Here is my analysis of the Bitcoin cycles, what to potentially expect + a bonus comparison that will surprise you.
1/20π§΅π
1.
~ What is it ~
The Bitcoin halving is nothing but a planned reduction in rewards miners receive.
When Bitcoin launched in 2009, miners were receiving 50 BTC per block.
β’ 2012 first halving: 25 BTC per block
β’ 2016: 12.5 BTC per block
β’ 2020: 6.25
β’ 2024: 3.12
~ What is it ~
The Bitcoin halving is nothing but a planned reduction in rewards miners receive.
When Bitcoin launched in 2009, miners were receiving 50 BTC per block.
β’ 2012 first halving: 25 BTC per block
β’ 2016: 12.5 BTC per block
β’ 2020: 6.25
β’ 2024: 3.12
2.
~ Main purpose ~
As Bitcoin was created in 2009 (post-2008 global crisis) its goal is to have an alternative to FIAT money which is not subjected to inflation.
Halving event is therefore essential to create the assumption for a deflationary protocol also called βhard moneyβ.
~ Main purpose ~
As Bitcoin was created in 2009 (post-2008 global crisis) its goal is to have an alternative to FIAT money which is not subjected to inflation.
Halving event is therefore essential to create the assumption for a deflationary protocol also called βhard moneyβ.
3.
~ Misconception ~
The general belief is that Bitcoin produces a bullrun every 4 years, post-halving events.
But this is not precisely true.
It does not depend on the 4 years, but more precisely on the block time.
Every 210,000 blocks of transactions.
~ Misconception ~
The general belief is that Bitcoin produces a bullrun every 4 years, post-halving events.
But this is not precisely true.
It does not depend on the 4 years, but more precisely on the block time.
Every 210,000 blocks of transactions.
4.
~ Supply & demand law ~
The halving events have historically always produced a bull run in the following months.
This is because of the simple law of supply & demand.
The scarcer the asset, the more value it takes as the demand rises.
~ Supply & demand law ~
The halving events have historically always produced a bull run in the following months.
This is because of the simple law of supply & demand.
The scarcer the asset, the more value it takes as the demand rises.
5.
The positive correlation between price and halving is therefore related to the demand.
But not only if it rises.
As the block reward will be cut in half, even having the same amount of buyers will contribute to increasing the price.
That's how supply & demand law works.
The positive correlation between price and halving is therefore related to the demand.
But not only if it rises.
As the block reward will be cut in half, even having the same amount of buyers will contribute to increasing the price.
That's how supply & demand law works.
6.
~ Prediction attitude ~
βPredictingβ cycles is something that always fascinated people.
As humans seek perfection, being able to catch when Bitcoin tops and bottoms could drastically improve portfolio performances.
Thatβs why everyone tries to βpredictβ.
~ Prediction attitude ~
βPredictingβ cycles is something that always fascinated people.
As humans seek perfection, being able to catch when Bitcoin tops and bottoms could drastically improve portfolio performances.
Thatβs why everyone tries to βpredictβ.
7.
This is the most difficult part as many things could destroy theories:
β’ Black swans (Covid, wars etc)
β’ Unexpected situations (FTX + LUNA collapse etc)
β’ White swans (change in monetary policies, bold moves from big players etc)
That's why having an open mind is crucial.
This is the most difficult part as many things could destroy theories:
β’ Black swans (Covid, wars etc)
β’ Unexpected situations (FTX + LUNA collapse etc)
β’ White swans (change in monetary policies, bold moves from big players etc)
That's why having an open mind is crucial.
8.
~ Charting the cycles ~
In any case, cycles could give us a βcompassβ for better navigation.
The Bitcoin price history is relatively new if we compare it to traditional finance which has more than 200 years.
But that's the data we have and we need to rely on.
~ Charting the cycles ~
In any case, cycles could give us a βcompassβ for better navigation.
The Bitcoin price history is relatively new if we compare it to traditional finance which has more than 200 years.
But that's the data we have and we need to rely on.
9.
~ 4 years plan ~
There are many metrics that we could apply to the Bitcoin chart, but one that fascinates me the most is the 4 years plan.
From top to top and from bottom to bottom we can find an interesting correlation between the length and the events.
~ 4 years plan ~
There are many metrics that we could apply to the Bitcoin chart, but one that fascinates me the most is the 4 years plan.
From top to top and from bottom to bottom we can find an interesting correlation between the length and the events.
10.
~ 2014-2017 ~
β’ From 2014 ATH to 2017 ATH : 211 bars + 1477 days, approximately.
β’ From 2015 bottom to 2018 bottom: 205 bars + 1435 days, approximately.
~ 2014-2017 ~
β’ From 2014 ATH to 2017 ATH : 211 bars + 1477 days, approximately.
β’ From 2015 bottom to 2018 bottom: 205 bars + 1435 days, approximately.
11.
~ 2017-2021 ~
β’ From 2017 ATH to 2021 ATH: 204 bars + 1428 days, approximately.
β’ From 2018 bottom to 2022 (potential) bottom: 205 bars + 1435 days, approximately.
~ 2017-2021 ~
β’ From 2017 ATH to 2021 ATH: 204 bars + 1428 days, approximately.
β’ From 2018 bottom to 2022 (potential) bottom: 205 bars + 1435 days, approximately.
12.
As you can see:
β’ From each top to the next one β© 205 bars/215 bars indicatively.
β’ From each bottom to the next one β© 205 bars/215 bars indicatively.
This is an interesting correlation that flashes the similar range periods that interpose with each other.
As you can see:
β’ From each top to the next one β© 205 bars/215 bars indicatively.
β’ From each bottom to the next one β© 205 bars/215 bars indicatively.
This is an interesting correlation that flashes the similar range periods that interpose with each other.
13.
~ 2022-2025? ~
Therefore:
β’ 2022 ATH β© 2025 ATH?
β’ 2022 bottom β© 2026 bottom?
Remember that this is just a consideration and something to add to your overall plan.
The best approach remains always to evaluate level by level.
But it's fascinating, isn't it?
~ 2022-2025? ~
Therefore:
β’ 2022 ATH β© 2025 ATH?
β’ 2022 bottom β© 2026 bottom?
Remember that this is just a consideration and something to add to your overall plan.
The best approach remains always to evaluate level by level.
But it's fascinating, isn't it?
14.
~ Circulation ratio ~
Another metric to add to is surely the impact that halvings will have.
On the first halving (28/11/12) 10.500.00 of BTC were available.
Now, theyβre more than 19 million.
Thus, the halving could have less impact as 90% of supply is already available
~ Circulation ratio ~
Another metric to add to is surely the impact that halvings will have.
On the first halving (28/11/12) 10.500.00 of BTC were available.
Now, theyβre more than 19 million.
Thus, the halving could have less impact as 90% of supply is already available
15.
~ Diminishing returns ~
This brings us to analyze the previous cycles and what we can expect in the future.
As the increase in overall awareness and money that flows into the market, the returns that we could gain, tend to be less pronounced compared to the past.
~ Diminishing returns ~
This brings us to analyze the previous cycles and what we can expect in the future.
As the increase in overall awareness and money that flows into the market, the returns that we could gain, tend to be less pronounced compared to the past.
16.
This is probably the natural evolution of a new financial asset and industry:
β’ More regulated
β’ More liquid
β’ More adopted
Think about the current capitalization.
What will happen if we will reach the stock market one?
Less volatility, we can suppose.
This is probably the natural evolution of a new financial asset and industry:
β’ More regulated
β’ More liquid
β’ More adopted
Think about the current capitalization.
What will happen if we will reach the stock market one?
Less volatility, we can suppose.
17.
That's what we can see if we compare the cycles returns:
β’ From 2012 halving to 2014 peak: 11.000%
β’ From 2016 halving to 2017 peak: 3685%
β’ From 2020 halving to 2022 peak: 685%
As you can see, there is a clear downtrend in returns, which are very big in any case.
That's what we can see if we compare the cycles returns:
β’ From 2012 halving to 2014 peak: 11.000%
β’ From 2016 halving to 2017 peak: 3685%
β’ From 2020 halving to 2022 peak: 685%
As you can see, there is a clear downtrend in returns, which are very big in any case.
18.
~ Final takeaway ~
As said before, we cannot rely only on cycles length when we have to decide when to buy/sell.
Past performances aren't a guarantee of future ones.
But they could help us to identify potential areas, taking into consideration working level by level.
~ Final takeaway ~
As said before, we cannot rely only on cycles length when we have to decide when to buy/sell.
Past performances aren't a guarantee of future ones.
But they could help us to identify potential areas, taking into consideration working level by level.
19.
This industry is still very small and subjected to speculative moves, which tend to be amplified when the majority of people believe in something.
However, the halving is not a narrative, is a technical feature written in the protocol.
And that's something to keep in mind.
This industry is still very small and subjected to speculative moves, which tend to be amplified when the majority of people believe in something.
However, the halving is not a narrative, is a technical feature written in the protocol.
And that's something to keep in mind.
20.
That's it!π―
β’ If you liked this thread, follow me @IamZeroIka for more crypto insights.
β’ Like and RT the first tweet to support my work!βοΈ
β’ If you want to have access to deeper guides and info, subscribe to my FREE newsletter! (link in bio)
That's it!π―
β’ If you liked this thread, follow me @IamZeroIka for more crypto insights.
β’ Like and RT the first tweet to support my work!βοΈ
β’ If you want to have access to deeper guides and info, subscribe to my FREE newsletter! (link in bio)
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