Bitcoin halving shakeout: 3 stages to watch before the parabolic breakout
Bitcoin (BTC) surprised investors by plunging to a low of $65,000 within the past 24 hours amidst a short-term market sell-off. This sudden drop in price has resulted in significant resistance at the $68,000 level, just a week before the highly anticipated halving event.
In light of these developments, Rekt Capital, a crypto trading analyst, recently outlined three stages related to the halving event that can help investors maximize their profits.
1. Final pre-halving retrace:
According to Rekt Capital, this first stage has already taken place, characterized by a decline in Bitcoin’s price as investors adjust their positions in preparation for the halving event. However, this retracement only amounted to 18%, much lower than the retractions observed in 2016 and 2020.
“This pre-halving retrace was -18% deep whereas in 2016 it was -38% and in 2020 it was -19% deep. This pre-halving retrace was the final bargain-buying opportunity in the Pre-Halving period,” the expert explained.
2. Re-accumulation phase:
After the retrace, Bitcoin enters the re-accumulation phase, characterized by sideways price movement. This phase typically lasts a few weeks or even longer. During this time, investors may become impatient and bored due to the lack of price changes.
“The goal now is for Bitcoin to move sideways, going into the halving and beyond. Many investors get shaken-out in this stage due to boredom, impatience, and disappointment with the lack of major results in their BTC investment in the immediate aftermath of the halving,” Rekt Capital noted.
3. Parabolic uptrend:
Once Bitcoin breaks out of the re-accumulation range, it enters an accelerated growth trajectory fueled by bullish sentiments. Historically, this phase has lasted over a year. However, the analyst suggests that the current market cycle could experience a shorter timeframe for this stage.
It’s worth mentioning that the recent Bitcoin all-time high before the halving event could potentially shorten the duration of this phase. Additionally, the impact of the exchange-traded fund (ETF) recently launched in the US could also influence this timeline.
Currently, Bitcoin is consolidating above $67,000, hoping to gain direction towards $68,000. However, by press time, Bitcoin was trading at $67,544.
It’s important to note that the content presented here should not be considered investment advice, as investing in cryptocurrencies carries risks.