The 20% decline is just a technical adjustment, and the trend of Bitcoin is still consistent with the previous halving cycle

According to Bitpush data, Bitcoin, the cryptocurrency with the largest market value, experienced its first sharp decline in this bull market this week, with its price falling from above $40,000 to around $32,000, a drop of 20%.

Although the plunge has triggered panic about a further market correction, by comparing Bitcoin's current bull market with the bull market in the previous halving cycle, Bitpush found that the cryptocurrency with the largest market value is still in the early stages of a bull market, and its trend is still very consistent with the trend after the last Bitcoin block reward halving in 2016.

The comparison shows that in the first 200 days after the halving, the price of Bitcoin was generally stable and the rate of increase was not obvious. However, after 200 days, affected by the long-term changes in the market supply and demand relationship, the price of Bitcoin will show a significant upward trend. The chart shows that around 250 days after the halving, the price of Bitcoin has reached about 5 times the price at the time of the halving.

The current price trend of Bitcoin is very consistent with the trend during the previous Bitcoin halving bull market in 2016. If this trend continues, the high point of this round of Bitcoin bull market may reach 250,000 to 300,000 US dollars.

However, the rise of Bitcoin is not smooth. Historical data shows that in the last bull market cycle, Bitcoin also experienced four large declines, some of which were more than 15%. But after each decline, Bitcoin was able to continue to rise after 50 to 80 days of adjustment and hit a new historical high.

Beyond historical data, the current fundamentals of the crypto industry and the macroeconomic situation of the entire world economy are no longer the same as the post-halving bull market in 2016.

As the world continues to implement quantitative easing and economic stimulus policies in response to the COVID-19 pandemic, the depreciation of major fiat currencies has caused global inflation. Bitcoin has been snapped up by institutions and individual investors as "digital gold" to store value, which has exacerbated the supply shortage of Bitcoin and accelerated the rise in Bitcoin prices.

The data in the chart shows that the rising curve of this round of bull market started earlier than the previous round of bull market, and the price rose to 5 times about a month earlier. With the current mature investment environment and ecology of crypto assets, more institutions are pouring into the crypto market. This round of Bitcoin bull market is likely to be more intense than the previous one.

Image source: Bitpush

AuthorLiang Che

This article comes from Bitpush.News. Reprinting must indicate the source.