The bitcoin halving in 2024 Bitcoin is the leading cryptocurrency and, in many ways, acts as an example for the market to follow. A unique aspect of this asset is that it is designed to go through a process called halving which creates scarcity, so that bitcoins can maintain their value. Specific, every four years, The number of bitcoins created falls by half and it is a very interesting time for trading. Because? Because when the number of 21 million bitcoins is reached, will not be mined anymore. And because by deliberately limiting the supply of new assets, scarcity affects the price of bitcoin and causes a race to the rise. Since its creation in 2011, bitcoin has experienced three pulls for this reason, each of them between 12 and 18 months after the halving. What has this been about the crypto winter and what does it have to do with the halving? For trading with long positions in bitcoin, the cycle is made to correspond to the four seasons of the year, so in summer is when the big rise in bitcoin arrives after a halving. It all starts with the halving and ends when it reaches its previous limit. Fall occurs when it reaches that maximum and begins to attract media interest, new investors and companies, which drive the price up. This period represents the period in which the asset exceeds highs, which shows that the bull market has made its journey. Thus, winter, the bear market, arrives when investors decide to take profits and cause falls from highs and to the next lows. There have been three crypto winters since 2011 and they have lasted about 13 months each. Finally, spring is the period before each halving, in which the price of bitcoin generally recovers from lows, but there is not much investor interest yet. We are supposed to be in this spring, although it seems evident that many in cryptocurrency trading already know the story and are taking a stand. Why? Because spring in bitcoin trading is time of the cycle in which it is planted (invest). In the same way that a farmer avoids planting too early in winter or too late in spring, digital asset investors want to know when spring has arrived. to maximize the growth of your investments. What are bitcoin farmers analyzing before the halving? To do this, certain parameters are analyzed in the history of bitcoin. For example, the time that has passed since the last high: The fall of bitcoin in previous crypto winters has historically occurred between 12 and 14 months after maximum. Secondly, the magnitude of the decline in the price of the asset: the previous lows occurred at a 83% of their respective highs. The third aspect that is looked at with a magnifying glass before trading is the capitulation of the miners: when bitcoin has approached minimum of previous cycles, many miners close their mines because they are no longer profitable. A statistic called bitcoin difficulty estimates how easy or difficult it is to mine bitcoins. When the difficulty is reduced, the minimums may be close. Fourthly, we look at the «thermocap» or how much money has been invested in bitcoin since its creation. A lower price/thermocap ratio indicates a minimum, while a higher ratio indicates a maximum. The last aspects to assess are exchange problems and volatility. When the price of cryptocurrencies falls, it tends to affect the viability of some exchange platforms such as Binance or FTX. Bankruptcies, bad news, or new regulations can also indicate a bottom. Finally, price volatility: a 50% increase in price from its minimum levels It is usually a good sign that that bottom has been reached, although it is also true that there have been examples in which such a rise has been followed by significant falls. Therefore, we are in the spring of bitcoin, prior to the halving that will take place in April 2024. However, it must be noted that to date there have only been three years in bitcoin. Come on, there’s a lot left to learn. Thus, we cannot ensure that this is the right time or not to trading in bitcoinwhat we do know is that we are at the right time to learn more about the cyclical trends of the cryptocurrency market in order to research, follow trends and determine by oneself whether the cycle will repeat for the fourth time.
What Is The Bitcoin Halving And How Can It Affect The Crypto Markets?
