Bitcoin Faces Significant Resistance Ahead Before New All-Time Highs

A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership.

According to Rekt Capital, Bitcoin’s price movements have been characterized by a recurring pattern over different cycles. This pattern revolves around a major resistance area. In bull markets, this resistance area ultimately marks the top of the market, signaling the beginning of new bear markets. However, once the subsequent bear market comes to an end, Bitcoin’s price eventually reverses and is able to surpass this same region of resistance. Breaking through this resistance area leads to a rally, propelling Bitcoin to new all-time highs.

What is interesting to note is that Bitcoin consistently breaks this major resistance area in the months following the Bitcoin Halving, represented by the color blue. The Bitcoin Halving event occurs approximately every four years and is designed to reduce the rate at which new Bitcoin is created.

In the current cycle, this resistance area begins at a price of $45,000. Looking back at previous halvings, we can observe that after the July 2016 Halving, it took Bitcoin 243 days to successfully retest the red resistance area as new support before rallying to new all-time highs. Similarly, after the May 2020 Halving, Bitcoin took 123 days to retest the resistance area before embarking on its rally to new all-time highs.

Based on this historical data, it is reasonable to assume that after the upcoming halving in April 2024, Bitcoin will once again retest the red resistance area as new support in the months following the event. This retest is crucial as it sets the stage for Bitcoin to make its way to new all-time highs. The timing of this retest may vary, taking either four months or eight months, as seen in previous cycles.

From these observations, we can draw some key takeaways. Firstly, the prices of Bitcoin tend to be cheaper before the halving event compared to afterwards. This suggests that accumulating Bitcoin before the halving can potentially yield a higher return on investment. By the time the halving occurs, it is beneficial to have already accumulated a significant portion of one’s Bitcoin holdings, in preparation for the months that follow.

Additionally, the previous all-time high region, which was once a formidable resistance, transforms into a new support level in the months after the halving. This shift indicates the growing strength and resilience of Bitcoin as it continues its upward trajectory towards new all-time highs.