Rekt Capital suggests a 40% decline in Bitcoin’s value ahead of the upcoming halving event. By extracting information from past cycles, analysts point out that these retracements have occurred in the past, typically about 60 days before the halving.
The current focus is on the pre-halving period over the next 42 days. This phase historically occurs after Bitcoin price retracements and then rallies. The analyst highlighted the pattern of retracements, bounces and retracements during this period, setting the stage for a surge to new all-time highs following a period of re-accumulation.
Comparing previous cycles, the analyst notes that retracements can vary, citing the 18% decline in the 2015-2016 period and the 40% retracement in 2016 as examples. A recent 20% retracement in 2020 is also mentioned. It is affected by external factors such as global pandemics.
He also explained the importance of the orange moving average for the year prior to the halving, showing historical trends for which it serves as reliable support. The current value of this moving average is approximately $36,000. It is suggested that this level could be tested again in 2024 if the Bitcoin price is likely to fall.
Additionally, the green 350-day moving average, currently at $60,000, is highlighted as a reference point. Historical data suggests that revisiting this green moving average during the halving could result in rejection.
The analysis highlights the uncertainty surrounding potential retracement rates, reminding us that emotional factors can influence market dynamics, especially during the halving period. The coming 40 days are considered critical, with the possibility of a retracement setting the stage for a rally before the halving.