- May 7, 2020
- Posted by: Tradingshot Articles
- Category: Cryptocurrency
The moment cryptotraders have been waiting for is finally here. Only 5 days left for Bitcoin’s Halving No3. We all know the significance of this event and the fundamentals behind it regarding the supply. On this study I will focus on the Halving trend-line (i.e. the line that connects all Halving dates) and how it can reveal the next Peak of the current Market Cycle.
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** The Halving trend-line **
As I mentioned above above it is the essence of this study and represents the trend-line that connects all Halving dates. This is displayed on the chart by the orange curve. As seen, the price doesn’t diverge much from the Halving trend-line before the Halving takes place on any of the Market Cycles. Only after the Halving do we see Bitcoin aggressively detaching from the Halving trend-line, which of course represents the parabolic run towards a new Cycle High.
** The Pre-Halving / Post-Halving rallies **
I have classified each Cycle into two phases: the pre-Halving and the post-Halving.
– The pre-Halving phase starts from the very first contact that the price makes with the Halving trend-line, near the end of the Bear Cycle. It ends at the Halving date itself.
– The post-Halving phase starts from the Halving date and ends at the Cycle’s Top (peak). Practically represents the parabolic bull run of the Cycle.
In Cycle 1, BTC rose +488% pre-Halving and +9034% post-Halving. The rise pre to post-Halving was +1750%.
In Cycle 2, BTC rose +290% pre-Halving and +2816% post-Halving. The rise pre to post-Halving was +870%.
This rise difference post-Halving between Cycles is -50%, meaning that Cycle 2 was half the rise of Cycle 1 pre-Halving.
Assuming each post-Halving rise is -50% of the previous Cycle and since the pre-Halving rise of Cycle 3 is more or less done at +145%, we can calculate the post-Halving rise as follows:
pre-Halving rise = -50% of 870% (Cycle 2) = +435%. +435% of 145% is +630%. Price-wise this is marginally north of $70000.
** Timing the Top **
All previous market peaks (Tops) have been on the outer tiers of the parabolic trend-lines generated by the Halving trend-line. Those are illustrated by the light dashed orange lines. The top of Cycle 1 was almost on Tier 3. The top of Cycle 2 was exactly on Tier 2. We can assume then that the top of Cycle 3 will not exceed Tier 1, which is around February 2022.
Of course this is just one of the many models and projections on the future peak of BTCUSD. Most place the top around $100000, some even go much higher. No matter how sophisticated the models are, they are of course subject to a degree of error. But $70000 is one of the more moderate projections you will see.
So how important do you think the Halving trend-line can be when it comes to estimating the Cycle phases? Do you agree with the $70000 Top? Feel free to share your work and let me know in the comments section!
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