A closely watched crypto analyst says Bitcoin (BTC) is about to enter a phase of the market cycle that has historically seen massive price corrections.
In a new video update, pseudonymous strategist Rekt Capital explains tells Its 65,500 YouTube subscribers indicate that Bitcoin is just a week away from entering a “theoretical technical danger zone” that has caused its price to fall as much as 30% in the past.
The trader’s so-called “danger zone” is a period of weeks before the halving, when miners’ rewards are halved. From March 14, the halving will last approximately 35 days.
“We are a week away from entering the theoretical technical ‘danger zone’ for the start of a pullback and pullbacks are at 22% to 30%.”
The trader says that in the previous two cycles, Bitcoin corrected two or four weeks before the halving, which takes place every four years.
“Based on the 2020 cycle, we see a 20% pullback here about two weeks before the halving. And in 2016, we had a 29% pullback about 28 days before the halving.
It is about 35 days away from the halving.”
The trader also says that since we haven’t seen a 30% pullback during the current cycle, investors should keep in mind that this is possible before the halving.
“So if we saw a 20% pullback around the halving in 2020, then maybe something like 20% could happen around this halving as well. Last week we saw a drop of 14%, and in January [a] minus 18% withdrawal…
Why couldn’t we see a 20% decline, worst case 25%, 30%? And keep in mind, we haven’t seen a 30% pullback in this cycle… So is it possible? It certainly is.”
Bitcoin is trading at $71,882 at the time of writing, down slightly in the past 24 hours.
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