- Bitcoin posts a strong weekly price performance.
- The recovery has banished the blues resulting from ETF approval.
- This uptick is in line with the halving theory.
Bitcoin ETF hype came crashing down as the leading cryptocurrency recorded a 22% peak-to-trough drawdown immediately following the SEC’s approval. However, this week has seen a shift in market sentiment, leading to a price recovery poised to recapture ETF highs ahead of the halving event in April.
Bitcoin Poised to Recover ETF Highs
Bitcoin is staging a steady recovery that saw prices top $47,600 on February 9. This performance marks a 24% rebound from the Jan 23 $38,500 local bottom that resulted during the distribution period post ETF approval.
The leading cryptocurrency is poised to close five consecutive daily green candles, signaling bullishness and a possible resurgence reminiscent of the pre-ETF hype period.
BTC recorded a yearly high of $49,200 on January 11, the day after ETF approvals, which triggered a sell-off that found support at $38,500 some two weeks later.
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While the current price is still approximately 3% below the yearly high, analyst Rekt Capital believes things are working out in line with his “5 Phases of The Bitcoin Halving” theory.
Halving Theory
Charting BTC price movements around past halvings, Rekt Capital theorized that there are five phases associated with the event. Beginning with a short period of “pre-halving downside” that sees a price retracement. This is followed by the “pre-halving rally,” which starts around 60 days before the halving and is driven by “investors [who] “Buy the Hype” to “Sell the News.”
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Rekt Capital calls the midpoint of the cycle “pre-halving retrace,” which covers a multi-week period that spans either side of the halving and is characterized by price depression knock-on effects resulting from selling the news. “Re-accumulation” follows in which Bitcoin records unremarkable price action for approximately five months, leading to investors leaving through boredom.
The final phase is the “parabolic uptrend,” in which the market leaves re-accumulation to post “accelerated growth on its way to new all-time highs.”
Rekt Capital noted the pre-halving rally is scheduled to begin next week, but based on this week’s rally, “things appear to be a little ahead of schedule.”
On the Flipside
- Rekt Capital‘s halving theory relies on past data, which should not be used to determine future price movements.
- BTC hash rate continues to hit new all-time highs, suggesting miner confidence going into the 2024 halving.
- Microeconomic trends, including dollar strength and inflationary pressures, weigh heavily on the investment sector.
Why This Matters
Bitcoin’s ability to rebound sharply shows why it remains appealing to investors seeking assets with long-term return potential. If the Rekt Capital’s halving theory mirrors past cycles, new highs above $69,000 remain feasible. Yet, price prediction, and cryptocurrency in general, is an inherently unpredictable game.
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