Bitcoin's halving won't see a 600% return this year — so adjust your strategy
Bitcoin's price volatility for the last 30 days stands around 4% — down from nearly 18% in April 2013. It's starting to look more like a traditional equity.
The clock is ticking on Bitcoin’s (BTC) halving and it appears the ETF mania has accelerated the timeline of its arrival. Indeed, we have just a couple of weeks left before the big event. So it’s no surprise that the halving is all crypto investors and media can talk about right now. But while we can still expect some predictable trading behavior in the wake of the big day, we’re now in a very different market that calls for different trading strategies.
Over the past three cycles, the halving has been all about the huge spike in volatility. We would typically expect a sell-off of 30%-40%, followed by a stratospheric rise to a new all-time high within, on average, 480 days of the halving date. This time, though, the spot Bitcoin ETF has changed everything.
To understand where the price of Bitcoin is going from here, it is the asset’s volatility that we need to look at more closely. Over recent months, we have seen the anticipated drawdowns as pre-halving excitement builds. Yet these drawdowns have been anemic by previous cycles’ standards. This time, Bitcoin’s corrections have been far shallower, not exceeding 25%. Indeed, the latest drawdown was only around 15% before BTC bounced back once again toward the $70,000 mark.
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