Bitcoin (BTC) has surprised investors by falling to a low of $65,000 in the past 24 hours amid an ongoing short-term market sell-off. The sudden drop in the price of Bitcoin came less than a week before the halving event, which saw Bitcoin hit significant resistance at $68,000.
In light of this development, crypto trading analyst Rekt Capital noted in an April 12 X (formerly Twitter) post that there are three phases surrounding the halving event that could help investors maximize profits.
The final pre-halving backtrack
According to this analyst, the first level has already occurred and is characterized by a drop in the price of Bitcoin as investors adjust their positions ahead of the halving event. The analyst noted that the retracement was only 18%, in contrast to the retracements in 2016 and 2020.
“The depth of the retracement before the halving was -18% compared to -38% in 2016 and -19% in 2020. This pre- halving retracement is the last buy-low opportunity before halving.”
Re-accumulation phase
With the retracement having taken place, Bitcoin has entered the re-accumulation phase. This phase is characterized by sideways price movement that sets the stage for the next phase of growth.
According to the expert, this re-accumulation process usually takes a few weeks, sometimes 150 days or more. He believes that during this time, investors may become impatient as the price changes without any change and they may get bored and anxious.
“The goal now is for bitcoin to move sideways to halve or even higher. Many investors are swayed by boredom, impatience and disappointment at this stage because of the lack of significant results from their BTC investments immediately after halving.
Parabolic uptrend
Once Bitcoin breaks out of the re-accumulation zone, it enters an accelerated growth trajectory as bullish sentiment emerges. According to the analysis, historically, this phase lasted for more than a year. However, Rekt Capital believes that this timeframe could be significantly shorter as the current market cycle accelerates.
Notably, this change in timeframe can be partially extrapolated from the recent all-time highs of Bitcoin. Historically, Bitcoin tends to reach all-time highs after halving events. However, in the current cycle prior to the event, Bitcoin peaked above $73,000.
The overall impact on the market of exchange-traded funds (ETFs) launched in the U.S. in January of this year could also alter this timeline.
Overall, Bitcoin has been consolidating above $67,000 in hopes of finding a direction that will push it toward $68,000. At press time, Bitcoin was trading at $67,544.
