Bitcoin (BTC) halvening has an interesting effect on market cycles as we have seen during the recent correction. The above chart for BTC/USD clearly demonstrates how Bitcoin (BTC) halvening has not just brought about the halvening of Bitcoin (BTC) mining rewards, but also the halvening of market cycles in a similar manner. The first period of correction shown on the chart ranges between November 2013 and February 2015. This correction lasted a period of 441 days. This was just before Bitcoin (BTC)’s halvening in 2016 which also halved the period of correction that followed. From December 2017 to August 2018, the market entered a correction after Bitcoin (BTC)’s second halvening in 2016. The duration of this correction was 245 days which is 55.5% of the duration of the correction that preceded it.
This means that halvening will not only cut in half mining rewards for Bitcoin (BTC) but it will also cut in half the duration of market cycles. As we have seen in the past, there are three segments of a cryptocurrency market cycle. The first cycle is called the Bitcoin (BTC) season during which the price of Bitcoin (BTC) reaches a new all time high. The second cycle is called the correction cycle during which the whole market goes through a correction. The third cycle is called the altcoin cycle during which altcoins complete their cycles against Bitcoin (BTC) and reach new all time highs. As the above chart shows, we already know that the altcoin cycle to follow will have half the duration of the previous altcoin cycle because the correction that followed Bitcoin (BTC)’s second halvening also had half the duration of the previous correction. This will pattern will follow for Bitcoin (BTC)’s third halvening in 2020 as well and as before, the duration of the cycles will be expected to halve.
Bitcoin (BTC) will follow the same pattern as long as there is Bitcoin (BTC) available to mine. Satoshi Nakamoto came up with such an excellent model that not only ensures that the demand for Bitcoin (BTC) keeps growing even as supply is constantly entering the market but also guarantees stability as the valuation of Bitcoin (BTC) grows higher. This means that Bitcoin (BTC)’s range of fluctuation will keep on narrowing down with each halvening cycle. The Wild West era that we are in now with cryptocurrencies will eventually come to an end following Bitcoin (BTC)’s own economic model.
This means that the 50x or 100x gains that we have seen in the case of Bitcoin (BTC) and most cryptocurrencies will eventually come to an end as the market matures. Higher market cap, in trillions of dollars will not be as easy to move as the market we have today. However, before that happens the market will have a series of aggressive rallies. We may be out of the 50x and 100x zones but 10x and 25x gains are still possible and highly likely during the next cycle. The correction is almost over and the altcoin season is about to begin. Bitcoin (BTC) may still end the year around $25,000 but altcoins have a better chance of surpassing their previous all time highs as they have had a more extensive correction and have yet to begin their cycles against Bitcoin (BTC) in addition to beginning new cycles against the US Dollar (USD).