In his last video update on YouTube, renowned crypto analyst Rekt Capital has delved into the complex dynamics surrounding Bitcoin’s halving events, and formulated a compelling argument as to why the market has not yet fully priced in the halving that took place on April 19. Based on historical data and patterns, Rekt Capital provided an in-depth analysis of the cyclical nature of Bitcoin’s price movements post-halving, suggesting that substantial growth phases still lie ahead.
Why Bitcoin’s Halving Isn’t Priced In
Rekt Capital began by revisiting the historical impact of Bitcoin halvings, which occur approximately every four years and reduce the block reward received by miners by half. This restriction of supply, if demand remains constant or increases, usually leads to a significant price increase. “Bitcoin’s halving is not priced in,” Rekt Capital claimed, noting that each previous halving led to a rally that not only reached but surpassed previous record highs.
“The halving every four years always precedes a fantastic surge in Bitcoin price action towards new all-time highs,” he noted. This consistent pattern builds a compelling story that post-halving market dynamics are predictable to some extent, yet complex enough to remain partially unforeseen by the market. “Two phases remain in the cycle: the post-halving reaccumulation phase (red) and the parabolic rally phase (green),” he stated.
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Rekt Capital focused on the reaccumulation phase that traditionally follows each halving, highlighting that this phase typically lasts around 160 days. During this period, the market often sees a consolidation in prices before a breakout leads to a parabolic rally. “We are currently in a period of reaccumulation again in this cycle. This is a post-halving reaccumulation,” he stated, highlighting the significance of this phase in preparing for the next bull run.
The analyst delved deeper into the nature of these cycles and noted deviations in current trends compared to previous cycles. “This cycle is showing an accelerated pace, with new all-time highs appearing 260 days before the halving, a first in Bitcoin history,” he explained. Such deviations suggest that while historical patterns provide a roadmap, each cycle can introduce new dynamics that influence market behavior.
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Rekt Capital has not overlooked the potential risks and market corrections that could occur. He warned of the initial rejection often seen after prices hit the post-halving high range, a trend noted in previous cycles. “Every time we have seen a first attempt after the halving to reach the high resistance level, that first attempt after the halving is one that is rejected,” he explained. This observation is critical for investors expecting immediate gains after the halving, as it tempers overly optimistic expectations with a realistic view of possible near-term retracements.
The analyst also addressed the issue of diminishing returns in successive cycles, a factor that seasoned Bitcoin investors keep a close eye on. Although the peak of each cycle has historically been higher than the previous one, the rate of growth has slowed. “If this was a one-for-one expansion of what we saw in the last cycle, getting us to $250,000 this time could be unrealistic, and we’re likely looking at a more moderate increase,” he predicted.
Nevertheless, Rekt Capital maintained its optimistic long-term outlook, suggesting that while the explosive growth rates of the early cycles may not be repeated, the overall upward trajectory of Bitcoin’s price after the halving remains intact. “This will be the most parabolic phase of the cycle where we see these gains coming very quickly in a short period of time,” he concluded, confirming the significant opportunities ahead for Bitcoin investors.
At the time of writing, BTC was trading at $68,561.
Featured image created with DALL·E, chart from TradingView.com