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BTC halving

Key observation in crypto: BTC halving introduces seasonality

A key observation in cryptocurrency is that the Bitcoin halving of mining supply every 210.000 blocks has introduced a periodic behavior in cryptocurrency markets.

The following chart shows the historical Bitcoin's price. The blue vertical lines mark the dates when the mining supply of bitcoin was cut in half.

Bitcoin Halvings

date	Reward change in BTC
11/28/2012	50 to 25
07/09/2016	25 to 12.5
05/11/2020	12.5 to 6.25
04/19/2024	6.25 to 3.125

As you can appreciate, there is nothing particularly enlightening about this graph. It is hard to see the effect of the halving of the mining supply. The price changes are so large that the information is lost in the details of price fluctuations.

Analysis of the Log(Price) chart. Bull and Bear markets.

If we look at the graph on a logarithmic scale, we can concentrate on the order of magnitude changes, paying less attention to the random fluctuations in the price. Then a pattern emerges:

Every 4 years on average, the mining supply is cut in half. Months after the halving of the mining supply a bull market sends the Bitcoin price to all-time highs, this bull market sends the price way above its cost of production and the whole thing ends up with a price bubble leading to a bear market that may last for years until the next halving occurs.

As the Bitcoin price skyrockets, people starts looking for alternative investments leading to the so called "Altcoin Season", where other major cryptocurrencies experiment a rise in price due to the Bitcoin bull market.

Comment on Bull / Bear markets

The following information can go with the graph:

Bitcoin Market Cycles

date	BTC Price $	Days after halving to Market Peak	Percent Gain	Days after peak to Market Bottom	Percent Loss
11/28/2012	13	335d	7323%	638d	80%
07/09/2016	593	518d	2190%	396d	76%
05/11/2020	9265	518d	557%	426d	74%
04/19/2024	70000	?	?	?	?

QR with live chart for technical analysis

QR with link to live BTC chart