The Bitcoin (BTC) block halving is only a week away as of this writing, and a large fraction of the crypto space is probably anticipating a major halvening rally to really take off this week. That is still possible, since this block halving is occurring under far different conditions than past block halvings. However, this article analyzes the price action before, during, and after the 2012 and 2016 block halvings, and finds that the halvening rally typically does not start to blast off until months after the halving.

Price Action Before, During, And After The 2012 Halving

The first block halving occurred on November 28 2012, and was the most significant block halving in terms of the block reward reduction, with the block reward declining from 50 Bitcoins (BTC) to 25 Bitcoins (BTC).

The price of Bitcoin (BTC) did slowly rise in the weeks leading up to the 2012 halving as shown in the below chart, rising from $10.28 in late October to $12.25 when the halving happened, and then continued to rise to $13.62 by the middle of December.

Chart courtesy of 99Bitcoins, the number 18 donates the exact time of the 2012 halving.

Therefore, in 2012 there was a fairly significant rally of 19% in the month before the halving, and a rally of 32% overall including the weeks after the halving.

Notably however, there was no sharp rally right around the time of the halving, just a slow and steady rise, and overall the halvening rally was nothing that could be considered major during the time before, during, and shortly after the halving.

That being said, in the year after the 2012 halving there were two major rallies as can be seen in the below chart, with Bitcoin (BTC) rising to $213 in April 2013, and then rising to $1,132 on November 29 2013, almost exactly one year after the halving. 

Chart courtesy of 99Bitcoins

Essentially, there was a significant rise in the price of Bitcoin (BTC) of roughly 30% in the weeks before and after the 2012 halving, but the real fireworks didn’t start to go off until months later. Specifically, 1-2 months after the halving, Bitcoin (BTC) began to have a serious rally.

Price Action Before, During, And After The 2016 Halving

The 2nd Bitcoin (BTC) halving, where the block reward declined from 25 Bitcoins (BTC) to 12.5 Bitcoins (BTC), occurred on July 9 2016. As can be seen in the below chart Bitcoin (BTC) did have a significant speculative rally before the halving, rising from $440 to $760 between late May and late June, which is an increase of over 70%. 

Chart courtesy of 99Bitcoins. The number 60 denotes the exact time of the 2016 halving. 

However, this speculative rally petered out before the halving even happened. In fact, Bitcoin (BTC) declined back to $650 by the time the halving happened, and Bitcoin (BTC) declined to $550 within a month after the halving due to Bitfinex being hacked.

Just like after the 2012 halving, a big halvening rally did take shape in the months after the halving as can be seen in the below chart.

Chart courtesy of 99Bitcoins

In September/October 2016, 3-4 months after the halving, the price of Bitcoin (BTC) began to steadily rise, and this turned into a full blown bull run that lasted throughout the duration of 2017, eventually bringing Bitcoin (BTC) to its all-time high of $20,000.

What We Can Expect For This Halving Based On Past Data, And What’s Different This Time

Based on past data, a speculative rally is possible ahead of the block halving, and indeed Bitcoin (BTC) did jump from $6,500 to $9,500 during the latter half of April, which is an increase of 46%. 

However, for people expecting a major price jump in the coming week as the halving approaches, or in the weeks after the halving, they may be disappointed based on the historical data. There was no major jump in price during the 2012 and 2016 block halving, nor in the weeks immediately following the halving.

The good news is that if a big halvening rally does not blast off this coming week or in the weeks following the halving, that is normal. A big halvening rally can still be anticipated in the months following the halving, and especially within 1 year following the halving.

What is different this time though is that the global economy is in a serious depression, unlike the 2012 and 2016 block halvings where the economy was in a global bull run. Bitcoin (BTC) is already by far the most lucrative asset class in 2020. Although Bitcoin (BTC) saw big losses in March it has recovered those losses and is now significantly above its opening price for 2020.

Basically, investors may flock to Bitcoin (BTC) more than ever before since it is the most lucrative asset in the world at this point, and the upcoming halving is making Bitcoin (BTC) investments even more enticing. Therefore, it is possible that the halvening rally could pick up steam in the coming weeks, rather than starting months from now.

Once again, even if the halvening rally does not kick off in the coming weeks, that is totally normal, since usually the halvening rally starts to happen months after the halving, as the lack of Bitcoin (BTC) mining selling pressure begins to add up.

It is not the end of the world if Bitcoin (BTC) does not see the halvening rally during May. In fact, that would be totally expected based on historical data. Even if Bitcoin (BTC) is flat in May or declines, the good news is that historical data suggests a massive rally is still likely to take shape in 2020.