Bitcoin’s halving may save market again, according to historical analysis
With the massive correction in the crypto market, more and more traders and investors are abandoning short- and medium-term forecasts and looking at macro data like Bitcoin’s halving cycles and the effect that they have in the crypto market.
Investors who use BTC halving as a market indicator often rely on the mid-halving, which sometimes becomes a bottom for the price of the digital gold. In the previous cycle, we saw a mid-term bounce off of the logarithmic support curve, which supposedly correlates with the 780th-880th day of the halving cycle.
Analysis based on Bitcoin’s halving model has its roots in the simple law of supply and demand. Block reward size is a tool that can directly affect Bitcoin total supply inflation, as miners put constant pressure on the market.
In two previous halving cycles, Bitcoin successfully bottomed out around the aforementioned day range, which is even more notable on the logarithmic chart.
Halving continues to affect the market
During the bullrun of 2021, many analysts, including Willy Woo, believed that the halving would no longer have such an impressive effect on the market as we have seen before. His main reasoning was the institutional exposure to the cryptocurrency market, which will bind him more to stocks and make him less independent.
We are yet to see the actual source of the pressure on the cryptocurrency market since Bitcoin is currently moving in correlation with the stock market, which had been plunging after unexpected inflation data and the Fed’s hawkishness.
In addition to macroeconomic pressure in the market, issues with Ethereum-based DeFi services and platforms are causing further panic in the market.
