Data from past cycles around halving and an important technical analysis tool show that the path of least resistance is higher. According to 10X Research, Bitcoin is trending up over 30 percent in the eight weeks leading up to the reward halving. Meanwhile, Bitcoin’s fourth halving event will take place on April 19.
The leading cryptocurrency gives these reactions during the halving process
cryptokoin.comAs you’ve been following from , Bitcoin has had an excellent few months since late 2021. Ignoring the US dollar and Treasury yields, the leading cryptocurrency continues on its way. While a pullback in prices is likely, the broader uptrend looks likely to continue, with prices revisiting and potentially surpassing the record high of $69,000 before the Bitcoin Blockchain’s fourth halving event on April 19, according to analysts. 10X Research examines historical data and a technical analysis indicator called the relative strength index (RSI). As a result, it gives this message.
Analysts say Bitcoin hits bottom 12-16 months before the halving. They also note that it entered an upward trend a year before and after the halving. More importantly for traders, the previous three cycles focusing on the halving show prices rising over 30% in the eight weeks leading up to the four-year event, which reduces the pace of supply expansion by 50%. The reward per block will be halved on April 19. Thus, it will drop from 6.25 BTC to 3,125 BTC.
“Bitcoin is rallying 32 percent before the halving!”
“Bitcoin is rallying an average of 32% in the 60 days before the halving,” says Markus Thielen, founder of 10X Research. Bitcoin was trading around $52,000 at the time of writing. A 32% rise from here based on historical data would mean prices could trade near the record high of $69,000 on or before halving day. Thielen also shares the following assessment:
The closer we get to Bitcoin halving, the more likely Bitcoin is to rise, as evidence from the last three halving cycles shows. The situation will not be different this time either, as there is a high perception within the crypto community that the halving will be on the rise. This perception undoubtedly trickles down to the TradeFi community, which has been aggressively purchasing these Bitcoin ETFs ahead of the halving.
There are strong inflows into US-based spot exchange-traded funds (ETFs). This shows that there is bullish sentiment among traditional investors. These regulated ETFs eliminate the hassle of investors storing cryptocurrencies. This way, it allows them to invest in cryptocurrency.
Monthly RSI points north: Is $74K on target?
Developed by J. Welles Wilder, the RSI is a momentum indicator that measures the speed and change of price movements over a specific period of time, usually 14 days, weeks or months. Data above 70 indicates a strong upward momentum in prices. A week ago, Bitcoin’s 14-day RSI broke above 80 for the first time since December. According to 10X Research, 12 of the previous 14 such RSI signals produced an average gain of 54% over the following 60 days. Thus, it was a harbinger of accelerating upward trends. Thielen reads this indicator as follows:
For reference, Bitcoin was trading at $48,294 when the last signal was triggered, and if history (+54% average return in 60 days) is any guide, BTC could rise to $74,600 based on this signal.
Past performance does not guarantee future results. Additionally, it is possible for macroeconomic factors alone to make or break trends. However, the current macro picture appears supportive of increased risk taking. Goldman Sachs increased its year-end forecast for the S&P 500 by 4% to 5,200. He cited strong global economic growth and weak dollar expectations for this.
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