š¦MARKET MIGHT RECOVERš¦
While the price of cryptocurrency has halved recently, that moment is a phenomenon in the crypto market. To understand this, break down the basic concepts and historical examples:
Understanding the halving reduction:
ā Definition: Halving is the process of halving the rewards of mining a new block, effectively reducing the rate at which new coins are created. For example, in Bitcoin, wages are halved about every four years.
ā Objective: The main objective is to control inflation by reducing the flow of new money into the market. It also creates scarcity, the price of which should theoretically increase over time.
ā Historical patterns of price-semi-post-semi-transactions
Immediate Price Impact: Historically, Bitcoin and other cryptocurrencies tend to rise in value in anticipation of the infusion. This is due to market speculation and expectations of future supply declines.
ā Post-halving dip: Unlike a half-halving dip, there may be a period of price correction or stability after the half-halving. This can be due to several reasons:
šProfitability: Traders can sell their holdings to take advantage of higher prices that occur before discounts.
šMarket sentiment: After the event, speculative promotions die down, reducing buying pressure.
šExternal factors: Prices can be affected by broader market conditions, regulatory news and macroeconomic factors.
historical examples
Bitcoin to be reduced by half:
š2012 Halving: After the first half in November 2012, the price of Bitcoin increased but followed with a reversal and correction in 2013 before entering a strong bullish phase.
šHalving 2016: After the second half of July 2016, bitcoin prices rose sharply in 2017 before a period of consolidation.
š2020 Halving: Bitcoin experienced dips and stagnation after the quarter in May 2020 but then surged in 2021 with a significant bull run.
