Analysis: “The Most Trusted Guide For BTC: Halving”
While the dreams of $ 100,000 in Bitcoin (BTC) are left for another spring, the US investment company Motley Fool has published a striking report. After Bitcoin hit an all-time high of around $69,000 in November 2021, many experts believed that BTC had enough momentum to reach $100,000. However, bankruptcies and macroeconomic conditions in the market caused great disappointment. BTC is down more than 70% from its peak. Drops of this magnitude can be considered normal when bear markets and crypto winters arrive. But historical data reveals that once the price drops are over, recovery takes time. In particular, the current bear market may take longer due to both high inflation and interest rates, as well as the risk of recession and crises in the sector.
Bitcoin needs to increase 490% to reach $100,000 in 2023. This may sound impossible, but Bitcoin has recorded more than 490% annual gains twice in its history. According to analyst Fulton, to understand what level Bitcoin will be at in 2023 and whether it can reach $100,000, we need to look at some patterns revolving around Bitcoin’s halving events.
Halving is the process of ‘halving the reward per block in mining production in mining cryptocurrencies (Bitcoin, Litecoin, Bitcoin Cash, etc.) at regular intervals’. When halvings come, they reduce the rate at which new Bitcoin enters circulation by halving the rewards received by Bitcoin miners. There have been three halvings so far. November 2012, July 2016 and May 2020. Initially the miner reward was 50 Bitcoins, but has since dropped to just 6.25 Bitcoins and will drop to 3,125 in May 2024. Surprisingly, when we apply the dates of past halvings to Bitcoin’s price chart, several important points emerge.
Based on data from the last three halvings, Bitcoin’s price usually bottoms out on average 18 months before the next halving. In the past, Bitcoin has provided modest returns gradually from the bottom to the next halving. On average, Bitcoin reaches 60% of its previous all-time high when the next halving arrives. This means that in May 2024, the price of Bitcoin will reach $40,000. This analysis and data means that Bitcoin has no chance of reaching $100,000 in 2023. According to the analyst, BTC will not reach $100,000 by 2025.
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