The highly anticipated Bitcoin (BTC) halving is just days away, scheduled for April 20. However, according to Bitwise Asset Management, price action in the month following this event has historically been disappointing. Bitwise noted that in the three previous halvings, Bitcoin’s price dropped in the month after the halving, but then saw significant gains in the year that followed, with triple-digit percentage point increases.
For example, after the 2012 halving, Bitcoin gained 9% in the following month, but then surged by a staggering 8,839% over the next year. A similar pattern occurred in the 2016 halving, with a 10% drop in the month after, followed by a 285% gain that peaked at $20,000 in 2017. In 2020, Bitcoin saw a 6% price increase in the month post-halving, and then experienced a 548% rise in the year that followed.
Bitwise stated that although the data is limited, it reveals an intriguing pattern where the market prices in the short-term impact of the halving but underestimates the long-term impact.
Interestingly, the current market cycle is the first time that Bitcoin has reached an all-time high before its halving. The cryptocurrency hit its peak of $73,679 on March 13, but has since corrected by 16% to a low of $61,500.
Industry executives share a pessimistic view in the short term. Markus Thielen, the head of research at 10x Research, predicted a potential $5 billion miner sell-off after the halving, which could put downward pressure on markets. Marathon CEO Fred Thiel believes that the halving rally has already been factored in, accelerating what would have been a post-halving rally.
In addition, trader and analyst Rekt Capital posted a list on X of market correction magnitudes since the 2022 bear market bottom. There have been five significant pullbacks ranging from 18% to 23%, and currently, markets have corrected by 16%, suggesting that there may be further to go.
Another analyst, Cold Blooded Shiller, noted that 30% corrections are not uncommon, hinting that BTC could potentially fall to around $51,000.
Overall, while the short-term outlook may be uncertain, the long-term impact of the halving on Bitcoin’s price is expected to be significant.