About every four years, the amount of Bitcoin created in the mining of a block gets cut in half. This is referred to as a ‘Halving.’ Until now, there have been two such occasions, with the upcoming third estimated to occur around May 17, 2020. Since Bitcoin becomes scarcer after halving, its price has historically increased after to make up for the demand.
Well-known trader and financial analyst @Rektcapital recently pointed out interesting price movements before and after the two previous halvings.
Bitcoin tends to retrace prior to its Halvings
Previously, $BTC saw a -38% retrace prior to Halving 2
And a -50% retrace prior to Halving 1
— Rekt Capital (@rektcapital) October 1, 2019
The dates for the first two halvings and the projected date for the third are given in the table below.
|First Halving||November 26, 2012|
|Second Halving||June 11, 2016|
|Third Halving||May 17, 2020|
There have been several similarities between the first and second halvings:
- The price reached a bottom before halving and began an upward move.
- The rate of increase is moderate prior to halving
- The rate of increase is rapid after halving.
The First Halving
The first halving occurred on Nov 26, 2012. Prior to, Bitcoin’s price dropped by 93.73%, reaching a low of $2.01 on November 18, 2011.
An upward move ensued, lasting 508 days and culminated with a high of $268.67 on April 10, 2013. This amounts to an increase of 13,294%.
This increase can be divided into two segments — one moderate and one rapid.
The moderate increase occurred prior to halving. It lasted for 374 days, from a Nov 18, 2011 low to the Nov 26, 2012 halving. During this time, the price increased by 519%, amounting to a rate of increase of 1.38% per day.
The rapid move occurred after halving, It lasted for 134 days and the price increased by 2087%, giving a rate of increase of 15.57% per day.
The second halving…