What would happen if the historical Bitcoin (BTC) halving cycle repeated

It's been quite a pessimistic week for Bitcoin, which has fallen by around 3% since the beginning of the week. In particular, the price action has made it difficult for Bitcoin to break above $27,000, which indicates the potential risk of more losses below this resistance level in the short term.

However, according to a cryptocurrency analyst, the current pullback could be the beginning of Bitcoin's historical cycle before each halving.

Analysts show that the Bitcoin price adjusts according to historical trends

Cryptocurrency analyst Rekt Capital said in an article that if there is any sign of Bitcoin's historical "halving cycle," a major price correction could be coming. Bitcoin halving cuts the block reward for miners in half.

This happens about every four years to slow the creation of new bitcoins and control inflation. Based on historical data from the previous two Bitcoin halvings, the price of BTC could fall by as much as 38% before the next halving.

In the chart shared on X (formerly known as Twitter), Rekt Capital shows a major pullback about six months before each halving. During the 2015 cycle, BTC retraced 25% in the 196 days before the 2016 halving.

In 2019, BTC retraced 38%, 196 days away from the 2020 halving. So, with the next halving expected to happen around April 2024, the market now seems to be in prime position for the next correction.

! [Bitcoin halving] (https://img-cdn.gateio.im/webp-social/moments-901ff9e656-3e64c65445-dd1a6f-69ad2a.webp)

Bitcoin is currently trading 60% below its all-time high, similar to past halvings. With 200 days to go until the 2020 halving, the BTC price is 60% below its all-time high. Similarly, 200 days before the 2016 halving, the price of BTC was 65% below its all-time high.

What tweaks mean for Bitcoin

Bitcoin's price direction is currently uncertain, especially with on-chain transactions on the blockchain currently at a three-month low. On-chain indicators show that 95% of Bitcoin's circulating supply hasn't changed hands in the past month, as investors appear to hold the cryptocurrency and wait for SEC approval for spot Bitcoin ETFs.

Although past performance is not always repeated, Bitcoin could see a sharp correction if this pattern recurs before the next halving. The current BTC price is $26,770 and if there is a 38% pullback, BTC could fall below $18,000. If that happens, it would be devastating for Bitcoin holders.

Read: Bitcoin price plummets: Long-term holders buy $1.35 billion worth of BTC

Although a price correction may be coming, Bitcoin's long-term growth prospects remain strong. Over the past decade, despite several setbacks, Bitcoin as the largest cryptocurrency by market capitalization has shown a sustained upward trend.

Bitcoin was named the best performing asset in asset investing this year by digital asset research firm Reflexivity. Billionaire hedge fund manager Paul Tudor Jones said now is the perfect time to buy BTC.

! [KQRh2Fs92q5ugOTPfivQck33BwRgMVTf5YulELB5.png] (https://img-cdn.gateio.im/webp-social/moments-901ff9e656-38b714d1c8-dd1a6f-69ad2a.webp)

Source: Golden Finance