Crypto community begins Bitcoin halving countdown as milestone date nears

Crypto community begins Bitcoin halving countdown as milestone date nears

The crypto community and many of its most high-profile players have started shifting focus toward the Bitcoin halving, an event that occurs every four years and cuts the market supply of new Bitcoin (BTC) in half.

At the next halving event scheduled for April 2024, the Bitcoin mining reward will reduce from the current 6.25 BTC per block to 3.125 BTC per block.

Binance CEO Changpeng Zhao took to Twitter to set the countdown for the next halving in an X (formerly Twitter) post to remind everyone that the next BTC halving event is only 135 days away.

Historically, the Bitcoin halving is linked to bullish momentum for the BTC price due to supply and demand dynamics. The halving of new supply amid growing demand usually pushes the BTC price to new highs in the months following the halving.

Two months prior to the last halving event in May 2020, the Bitcoin price was trading at less than $10,000. As the event drew closer, bullish momentum saw BTC’s price surpass the previous cycle’s all-time high of around $17,000. After the halving, the BTC price broke into parabolic momentum and created an all-time high of almost $69,000.

Popular trader and analyst Rekt Capital also took to X to elaborate on the different phases of a BTC bull cycle. The analyst divided the timeline into pre-halving and post-halving events, highlighting that approximately 60 days before the halving, a pre-halving rally tends to occur as investors tend to “Buy the Hype” to “Sell the News.”

However, the euphoric price surge in the pre-halving period is usually followed by a retracement around the time of the actual halving. In 2016, the pre-halving retracement was 38%, while the 2020 pre-halving retracement was 20%.

The pre-halving pullback is often followed by a multi-month reaccumulation phase during which the BTC price rises and falls, with little gains during a period of stagnation. Many investors get shaken out in this stage due to boredom, impatience, and disappointment with their BTC investment’s lack of performance in the halving’s immediate aftermath.

Bitcoin halving cycle phases. Source: X/Rekt Capital

The accumulation phase is then typically followed by a parabolic surge, in which Bitcoin breaks out from the reaccumulation area to hit new highs. During this phase, Bitcoin experiences accelerated growth on its way to new all-time highs.