According to CoinDesk, Bitcoin is likely to experience a rally of over 30% in the eight weeks leading up to its reward halving, based on data from 10X Research. The fourth halving is scheduled for April 19, and Bitcoin's monthly RSI has crossed above 80, a level that has historically indicated 60-day gains of over 50%. Despite a resurgent U.S. dollar and Treasury yields, Bitcoin has performed well in recent months, reaching its highest level since late 2021. Although a price pullback is possible, the overall uptrend is expected to continue, with prices potentially surpassing the record high of $69,000 before the fourth mining reward halving.
The well-known theory that Bitcoin bottoms out 12-16 months ahead of halving and experiences uptrends before and after the event has been supported by past data. In the previous three cycles centered around halving, prices surged by over 30% in the eight weeks leading up to the event, which reduces the pace of supply expansion by 50%. The upcoming halving will reduce the per-block reward from 6.5 BTC to 3.25 BTC. According to Markus Thielen, founder of 10X Research, Bitcoin rallies an average of 32% in the 60 days before halving. Based on this data, prices could trade close to the record high of $69,000 on or before halving day.
Strong inflows into U.S.-based spot exchange-traded funds (ETFs) indicate a bullish sentiment among traditional investors. These regulated ETFs allow investors to gain exposure to cryptocurrency without the hassle of storing coins. The RSI, a momentum indicator that measures the speed and change of price movements over a set period, has crossed above 80 for the first time since December. 10X Research found that 12 out of 14 previous RSI signals led to accelerated uptrends, with an average gain of 54% in the following 60 days. Thielen noted that if history is any guide, Bitcoin could rally to $74,600 based on this signal. However, past performance does not guarantee future results, and macroeconomic factors could impact trends. The current macro picture appears supportive of increased risk-taking, as the U.S. implements the most stimulative fiscal policy in years. Goldman Sachs has raised its year-end forecast for the S&P 500 by 4% to 5,200, citing expectations for strong global economic growth and a weaker dollar.
