The pre-halving plunge was caused by profit-taking, uncertainty and technical factors, which led to price volatility, affected market sentiment and increased trading volume. Still, historical data shows that halvings are often followed by a rally, as reduced supply boosts prices in the long term.
Bitcoin’s plunge before halving
Bitcoin halving is a pre-set mechanism in the Bitcoin network , a halving event occurs whenever the number of blocks on the Bitcoin blockchain reaches a specific number. During this event, the Bitcoin rewards miners receive are halved, reducing the supply of new Bitcoins. Halving events usually have a significant impact on the price of Bitcoin.
Reasons for the plunge before halving
Before the halving, the Bitcoin market usually experiences a period of selling pressure, which is usually caused by the following factors:
The impact of the plunge
The plunge before the halving can have the following impact on the Bitcoin market:
Post-Halving Rebound
While the pre-halving plunge may be concerning, historical data shows that a post-halving rebound is typically followed. The halving event reduces the supply of new Bitcoins, potentially boosting prices in the long term. However, it's worth noting that price rebounds are not guaranteed and may be affected by other market factors.
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