Crypto Week: Downvember Before a Bitcoin Halving Rally

The month of October was very successful for the crypto assets in 2023. Bitcoin (BTC) added 27%, Ethereum (ETH) prices went up by 7%. So, the industry had another positive October in the market history. The ‘Downvember’ is following the ‘Uptober’.

Bitcoin prices were down in November during four years out of the last five years. BTC prices dropped by 33% in 2018, by 20% in 2019, by 9% in 2020 and by 20% in 20%. The average decline is 20%. Extrapolation of this number into 2023 suggest that BTC prices may fall to at least $27,500, or likely to a strong resistance at $23,000-25,000. This might be painful for those who bought BTC at highs of a recent rally. But the bigger would be the drop the more attractive could be picking BTC up ahead of the five-month halving rally. 

The fourth halving will happen in April 2024. Every time a halving boost BTC prices. The rally started five month before the halving and continued five month after it. It would be unwise to suggest BTC prices would surge dramatically, as every time the rally becomes smaller than the previous one. BTC prices added 130% during five month before the first halving in 2012, 70% - in the same period before the second halving in 2016, and only 33% during five month before the third halving on May 11, 2020. Thus, we may expect BT prices to go up by around 15% this time. Bitcoin also added about 25% after the halving event. So, we may have a 40% rally in Bitcoin from December 2023 through September 2024. This is much better.

Whales are seen to understand the story. Capital inflows into ProShares Bitcoin Strategy ETF (BITO) during the last week was at $208.6 million, the highest since July. It is not a false start, as big money need some more time to be allocated.