TL;DR
- Bitcoin’s recent drop since the April 2024 halving is comparable to the post-halving correction in 2016, just before the 2017 bull run.
- Following the 2016 halving, Bitcoin’s price fell 27% from $650 to $474, before peaking at $20,000 in December 2017.
- On August 5, Bitcoin fell to $49,221, a 20% loss from its peak of $70,000 in July, but has shown signs of recovery, surpassing $56,000 early on August 6.
The recent drop in Bitcoin price, which has followed the April 2024 halving, has caught the attention of analysts due to its striking similarity to the pattern observed in the 2015-2017 cycle.
Veteran trader Peter Brandt has compared the current decline to the drop that occurred after the 2016 halving, suggesting that we could be on the cusp of a bull run similar to the one experienced seven years ago.
Please note that $BTC decline since halving is now similar to that of the 2015-2017 Halving Bull market cycle pic.twitter.com/cIm3WKzBog
— Peter Brandt (@PeterLBrandt) August 5, 2024
In 2016, Bitcoin‘s price dropped 27% from $650 on the day of the halving to $474 in one month, before experiencing an impressive surge that took it to a high of $20,000 in December 2017.
Currently, Bitcoin has seen a 26% drop from its post-halving price of $64,962, dropping to $49,221 on August 5.
This 20% drop from the peak of $70,000 in July has raised concerns, but it has also shown signs of recovery, with the price surpassing $56,000 as of early August 6.
This dynamic has led some analysts to speculate about a possible repeat of the previous cycle’s pattern.
However, not all analysts are optimistic.
Benjamin Cowen has suggested that the current situation could mirror the pattern of 2019, when prices rose in the first half of the year only to face a massive correction in the second half.
This outlook suggests that the market could be in the midst of a deeper correction phase before a possible recovery.
Possible future scenarios for Bitcoin
Tim Kravchunovsky, founder and CEO of decentralized telecom network Chirp, suggests that crypto assets could experience a faster recovery compared to other risk assets, similar to what was seen in 2020 during the pandemic.
According to Kravchunovsky, macroeconomic factors are influencing the market, and we could see a decoupling of cryptocurrencies from traditional markets, which could lead to a steeper and faster recovery.
Although the Bitcoin market is going through a significant correction phase, the similarity with historical patterns and the opinions of various analysts suggest that the market could be preparing for a recovery.
History shows that significant declines often precede strong rallies, and the next few months will be crucial in determining whether this pattern will repeat itself.
