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Bitcoin may bottom in October if historical reward-halving cycle holds
TL;DR
Bitcoin's next mining reward halving is approaching, with fewer than 100,000 blocks left. Historical trends suggest that bear markets may end 12 to 18 months before the halving, potentially indicating a market bottom in October.
Key points
- Bitcoin's next mining reward halving is approaching.
- There are fewer than 100,000 blocks left until the halving.
- Miners currently receive 3.125 BTC per block.
- The reward will drop to 1.5625 BTC in April 2028.
- Bear markets often end 12 to 18 months before the next halving.
This is an excerpt from CoinDesk newsletter 'Daybook.' Sign up here, if you haven't already.
We're more than halfway to the Bitcoin blockchain's next mining reward halving, a programmed supply slowdown that occurs every 210,000 blocks. There are now fewer than 100,000 blocks to go, and bears should take note even though they appear to have the upper hand in the market at the moment.
To appreciate the importance of this number, it helps to understand what a block actually is. The Bitcoin blockchain is a decentralized ledger containing a record of every transaction since its inception. Miners compete to add batches of transactions to the chain, and are rewarded with newly created bitcoin. A new batch, or block, is added roughly every 10 minutes, and miners currently receive 3.125 BTC each time.
In less than two years, or around April 12, 2028, that figure will drop by 50% to 1.5625 BTC, based on the number of blocks remaining.
That's important because bitcoin bear markets have tended to end between 12 and 18 months before the next halving. This means the process could begin as early as October, a projection veteran chart trader Peter Brandt recently made.
It also means bears could continue to dominate price action for at least the next couple of months. There are plenty of risks, such as elevated oil prices, hardening Treasury yields and ETF outflows, that could deepen the selloff in the near term.
According to Deribit's Chief Commercial Officer Jean-David Péquignot, the $76,000 to $77,000 price zone is the immediate critical support level for bitcoin.
"A clean breakdown here brings $70,000 to $72,000 into view; the next major level below that is the $60,000 level," he told CoinDesk. Stay alert.
Read more: For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today . For a comprehensive list of events this week, see CoinDesk's "Crypto Week Ahead."
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Q&A
What is the significance of Bitcoin's mining reward halving?
Bitcoin's mining reward halving reduces the reward for miners by 50%, impacting supply and potentially influencing market prices.
When is the next Bitcoin halving expected to occur?
The next Bitcoin halving is projected to occur around April 12, 2028, when the reward will decrease from 3.125 BTC to 1.5625 BTC.
How do bear markets relate to Bitcoin's halving cycle?
Historically, Bitcoin bear markets have tended to end 12 to 18 months before the next halving, suggesting a potential market bottom could occur as early as October.
Who is Peter Brandt and what is his prediction for Bitcoin?
Peter Brandt is a veteran chart trader who predicts that Bitcoin could hit $250,000, but only after a market bottom later this year.
