Halving 1: 9940% Return, Halving 2: 3247%, Halving 3: 1060% ???
Bitcoin has experienced 2 halving events since its inception in 2008, the first on 28 November 2012 and the most recent halving event on 9 July 2016, whereby mining rewards are reduced by 50%. Each one of these events has been preceded with a strong uptrend in the months leading up to the event and each of these events experienced a significant rally for the subsequent 12 - 18 months from the halving date. Bitcoin's next halving date will take place roughly 20 May 2020 and, like the previous 2 events, I am expecting an uptrend in the months running up to the event as well as in the months thereafter.
To see how these events compare to the upcoming event 18 months from now, we can look at the duration and returns between each halving event date and its next ATH. As per my previous longer term post, I believe Bitcoin should move within either the orange channel or the yellow channel over the longer term. In the short to mid term, we should find out which of these channels it's going to be as the market patiently awaits a decision by the SEC regarding the Van Eck Solid X Bitcoin ETF application which has been ongoing for quite a few months now.
29 December 2018 is decision day for the Van Eck ETF but the SEC may defer the decision one last time to 29 February 2019, in which case I expect the price to fall below the larger uptrend support for a retest of the 2018 annual lows. If the Van Eck ETF does get approved on 29 December 2018, this may be the catalyst for the bull run starting in Q1 2019.
If the ETF decision is deferred on 29 December, I expect a downtrend in January with a potential break of the yearly lows to test the $4800 support (0.236 fib) and the bull market may then only potentially begin in Q2 if there is ETF approval on 29 February 2019, in which case there should be a move back above the prior uptrend support (current resistance) and back inside the yellow channel. In case of ETF approval on 29 February 2019, I expect a strong uptrend back into the yellow channel and a continuation of the uptrend once BTCUSD is holding the channel support.
If the Van Eck ETF is rejected on 29 December 2018 or on 29 February 2019 then there may see a sharp drop to the $3000 support at the bottom of the orange channel where BTCUSD should consolidate and slowly rise in the months preceding the next halving event around 20 May 2020.
When the first gold ETF was launched in 2003, there was a 300% rise in the price of gold which was already an established asset class. A Bitcoin ETF along with the upcoming 2020 halving should be the catalyst we have all been waiting for and should drive the next bull run to McAfee price prediction levels.
Now let's look at the duration and returns of the prior events.
The first halving event:
Date:
28 November 2012
Duration from Halving Date to next ATH:
364 Days (1 year)
Return from Halving Date to next ATH:
9940%
Second Halving Event:
Date:
9 July 2016
Duration:
525 Days
Return from Halving Date to next ATH:
3247%
The second halving event's rate of return (from the halving date to the next ATH) works out to be just under 1/3 of that of the first halving event (3247% / 9940 X 100 = 32.665% of the first halving's rate of returns). If we apply the same principle so that the upcoming halving event achieves just under 1/3 of the second halving event's rate of return then there should be a 1060% return from the next halving date until its next ATH (32.665% of 3247% = 1060%).
Next Upcoming Halving Event:
Date:
+- 20 May 2020
Duration:
+-560 Days to +-581 Days
Return from Halving Date to next ATH:
1060%
Price Target:
If the Bitcoin downtrend continues and moves towards the bottom of the orange channel support first, then I suspect Bitcoin will have closed above the larger yellow uptrend and for price to be holding support at $8060 on the halving date. Based on a 1060% return, there should be a strong uptrend towards the bottom of the yellow channel for a target of $85430 over 560 days.
If Bitcoin moves back inside the yellow channel on news of an ETF approval, then I expect the price to have found support at and closed above $31766 (1.618 fib) by the halving date around 20 May 2020 and for a strong uptrend to continue from there for 580 days to the top of the orange channel resistance (price could even potentially move higher to the yellow channel resistance). Based on a 1060% return, the price target at the top orange channel resistance is expected to be $336720.
I know these targets sound ridiculous but I remember thinking $5k was ridiculous back in 2013 when BTC was still $100.
Good luck and happy trading!
Previous chart:
To see how these events compare to the upcoming event 18 months from now, we can look at the duration and returns between each halving event date and its next ATH. As per my previous longer term post, I believe Bitcoin should move within either the orange channel or the yellow channel over the longer term. In the short to mid term, we should find out which of these channels it's going to be as the market patiently awaits a decision by the SEC regarding the Van Eck Solid X Bitcoin ETF application which has been ongoing for quite a few months now.
29 December 2018 is decision day for the Van Eck ETF but the SEC may defer the decision one last time to 29 February 2019, in which case I expect the price to fall below the larger uptrend support for a retest of the 2018 annual lows. If the Van Eck ETF does get approved on 29 December 2018, this may be the catalyst for the bull run starting in Q1 2019.
If the ETF decision is deferred on 29 December, I expect a downtrend in January with a potential break of the yearly lows to test the $4800 support (0.236 fib) and the bull market may then only potentially begin in Q2 if there is ETF approval on 29 February 2019, in which case there should be a move back above the prior uptrend support (current resistance) and back inside the yellow channel. In case of ETF approval on 29 February 2019, I expect a strong uptrend back into the yellow channel and a continuation of the uptrend once BTCUSD is holding the channel support.
If the Van Eck ETF is rejected on 29 December 2018 or on 29 February 2019 then there may see a sharp drop to the $3000 support at the bottom of the orange channel where BTCUSD should consolidate and slowly rise in the months preceding the next halving event around 20 May 2020.
When the first gold ETF was launched in 2003, there was a 300% rise in the price of gold which was already an established asset class. A Bitcoin ETF along with the upcoming 2020 halving should be the catalyst we have all been waiting for and should drive the next bull run to McAfee price prediction levels.
Now let's look at the duration and returns of the prior events.
The first halving event:
Date:
28 November 2012
Duration from Halving Date to next ATH:
364 Days (1 year)
Return from Halving Date to next ATH:
9940%
Second Halving Event:
Date:
9 July 2016
Duration:
525 Days
Return from Halving Date to next ATH:
3247%
The second halving event's rate of return (from the halving date to the next ATH) works out to be just under 1/3 of that of the first halving event (3247% / 9940 X 100 = 32.665% of the first halving's rate of returns). If we apply the same principle so that the upcoming halving event achieves just under 1/3 of the second halving event's rate of return then there should be a 1060% return from the next halving date until its next ATH (32.665% of 3247% = 1060%).
Next Upcoming Halving Event:
Date:
+- 20 May 2020
Duration:
+-560 Days to +-581 Days
Return from Halving Date to next ATH:
1060%
Price Target:
If the Bitcoin downtrend continues and moves towards the bottom of the orange channel support first, then I suspect Bitcoin will have closed above the larger yellow uptrend and for price to be holding support at $8060 on the halving date. Based on a 1060% return, there should be a strong uptrend towards the bottom of the yellow channel for a target of $85430 over 560 days.
If Bitcoin moves back inside the yellow channel on news of an ETF approval, then I expect the price to have found support at and closed above $31766 (1.618 fib) by the halving date around 20 May 2020 and for a strong uptrend to continue from there for 580 days to the top of the orange channel resistance (price could even potentially move higher to the yellow channel resistance). Based on a 1060% return, the price target at the top orange channel resistance is expected to be $336720.
I know these targets sound ridiculous but I remember thinking $5k was ridiculous back in 2013 when BTC was still $100.
Good luck and happy trading!
Previous chart:
