- The recent drop in Bitcoin’s price reflects a historical pre-halving behavior.
- Bitcoin’s price often behaves in a “half-up, half-down” pattern during the pre-halving year.
- During such periods, the market wrecks both the bulls and bears alternatively.
The founder of Into The Cryptoverse, Benjamin Cowen, thinks the recent drop in Bitcoin’s price reflects a historical pre-halving behavior. According to Cowen, in the pre-halving year of Bitcoin, the price often behaves in a “half-up, half-down” pattern. During such periods, the market wrecks both the bulls and bears alternatively.
Cowen explained that in the past halving cycles, price wrecks were part of patterns that transformed into a sustained price increase. As part of this price development, the recent drop puts Bitcoin into the support area near $25,000.
According to Cowen, analysts pay attention to the altcoin market during the pre-halving volatility. They try to figure out the main reason behind Bitcoin’s price rally, whether it be a transfer of assets from the altcoin market to the blue chips or fundamental market indicators.
Using historic data between 2019 and 2020, Cowen showed cases that support both a move from altcoins to the blue chips and a rally backed by fundamental factors. He compared Bitcoin’s market condition with the total altcoin market caps.
Cowen explained his views using the extent of variation, or convergence, between both entities. An alignment between both variables reflected a fundamental influence behind the price trend. On the other hand, when they did not align, it meant funds flowed from the altcoin market to Bitcoin.
The recent Bitcoin price trajectory puts it below the bullish pivot. According to Cowen, that is not yet a confirmation that the price will capitulate further. However, he sees it as a warning sign in sync with an earlier signal from the total altcoin market cap a month ago.
Bitcoin exchanged for $25,720 at the time of writing, slightly below significant support at $25,800.
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