Bitcoin nears pre-halving 'danger zone': Is a crash imminent? ?

An analyst said on the X platform that Bitcoin is gradually approaching a critical turning point. This “danger zone” has historically coincided with significant price corrections ahead of Bitcoin’s halving events, raising concerns about a possible crash in the coming weeks.

Bitcoin is approaching the “danger zone”

According to the price chart, Bitcoin is trading above $72,400 at the time of writing. However, as time passes, the cryptocurrency is gradually approaching the "danger zone." Typically, when prices are in this area, as past price action has shown, Bitcoin tends to pull back sharply, giving up gains. This zone is time-based and usually occurs approximately two to four weeks before the halving.

Bitcoin approaches “danger zone” | Source: Analysts on X Platform

The network is expected to halve its miner rewards in approximately 33 days in mid-April 2024. Given past price action, this could cause miners to start selling Bitcoin, thus depressing its price and dampening current market optimism.

After miners receive Bitcoin rewards, they usually choose to sell some of the Bitcoins to ensure profits. They can control fluctuations in revenue by liquidating inventory holdings, especially after the Bitcoin halving. In addition to this, they can also choose to sell Bitcoin on exchanges or over-the-counter (OTC) to diversify their assets or invest in mining infrastructure to stay competitive.

Will BlackRock and others prevent price declines?

Despite the possibility that Bitcoin will decline before the halving, some community members remain optimistic. They firmly believe that if a spot Bitcoin exchange-traded fund (ETF) is approved, it will be a game changer. According to their analysis, billions of dollars in capital inflows brought by spot Bitcoin ETFs are expected to offset the selling pressure of miners.

Bitcoin price trending upward on daily chart | Source: BTCUSDT on Binance, TradingView

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