Bitcoin plummets before halving

Bitcoin usually plummets before halving, due to speculation, miner pressure and psychological factors. The plunge occurs weeks or months before the halving, and historically there have been significant drops of 50% to 65%. Investors should be aware of this risk and prepare before the halving to minimize losses.

The time before the Bitcoin halving plummeted

The Bitcoin halving is a key event in its design, occurring every four Occurs once a year, and each time the block reward will be cut in half. This results in a reduction in the supply of Bitcoin, which may lead to an increase in price. However, halvings are usually preceded by a sharp drop.

Reasons for the plunge

• Speculative activities: Investors will buy Bitcoin in large quantities before the halving, expecting the price to rise. When the halving actually happens, they may sell off heavily to cash out their profits, causing the price to plummet.
• Miner Pressure: As block rewards decrease, miner income will also decrease. This could force them to sell Bitcoin to cover operating costs, exacerbating the price decline.
• Psychological factors: The hype and expectations on the eve of the halving may prompt some investors to buy Bitcoin at high prices. When the halving actually happens and the price doesn’t live up to expectations, this can lead to disappointment and selling behavior.

Timing of the plunge

The timing of the Bitcoin plunge before the halving is difficult to predict, but it usually occurs weeks or months before the halving. . This may be due to investors gradually accumulating Bitcoin before the halving and then quickly selling off when the halving occurs.

Historical Plunges

Past Bitcoin halvings have been accompanied by plunges:

• 2012 Halving: Before the Halving Plunged 50% in 6 months
• 2016 Halving: Plunged 65% 9 months before halving
• 2020 Halving: Plunged 50% 3 months before halving

Impact

The plunge before the halving may cause significant losses to investors. Investors should be aware of this possibility when investing in Bitcoin and prepare accordingly before the halving.

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