We begin the article with the wisdom that says:

“Those who do not remember the past are doomed to bring it back.”

With only 9 hours left to the third halving that will happen this evening, the cryptocurrency market has been subjected to severe levels of volatility, with Bitcoin dropping 20% ​​in a matter of hours.

The one who looks at the recent history sees that similar developments occurred in the price of Bitcoin in July 2016 and exactly two days before the second halving where the Bitcoin fell by 11%.

Bitcoin in 2016 and 2020:

The primary digital currency, and most of the crypto market, is declining.

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After an impressive recent boom and touching the psychological level of $10,000, Bitcoin has fallen below $8,000 on some trading platforms.

The notable drop of 20% in which Bitcoin fell quickly to trade at the time of writing at $8,545.

After hours, the bitcoin mining reward will fork and the reward received by miners will drop to 6.25 bitcoins per block, and the bitcoin split is generally seen as a positive event as supply will shrink.

Looking at historical data, Bitcoin went through something quite similar for nearly four years. Initially, Bitcoin surged more than 70% in the weeks leading up to the second halving, which happened on July 9, 2016.

Then, two days before the event on July 7, Bitcoin recorded a decline of 11%, as in a violent trading day, the price fell from 678 to 604, before recovering to $ 640.

It is worth noting that on the day of the second halving, the price of Bitcoin fell again from $663 to $625.

Checking the bigger picture:

Despite the short-term negative price effects on Bitcoin, the macro data indicates that after 2016, and in fact even after 2012 (the year the first fork occurred), the price of Bitcoin soared.

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In November 2012 bitcoin was trading at about $12, the following year it rose 90-fold to about $1180.

As mentioned above, when the second bitcoin split occurred, the price of bitcoin was estimated at $660, after which the currency jumped to $2,800 in July 2017, and then reached the record level recorded so far at $20,000 in December 2017.

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in conclusion:

Although past data is not a valid price indicator of future events, the similarities are now obligatory to note, as they are very close and similar.

If the price of the asset rises in the following months, it is worth raising the question of whether history can eventually repeat itself, as it may not, of course.

It should be noted that this article is not a recommendation or a temptation to enter into Bitcoin trading, the decision is your decision and the wallet is your wallet.

Read also:

Simple explanation of the Bitcoin mining reward split process

How will the Bitcoin mining reward split affect China’s miners compared to others?