Analyst's Forecast: Bitcoin May Drop by 50% Ahead of Halving Due to Historical Trends and Decreasing Liquidity

Bitcoin, the world's largest cryptocurrency, is once again in the spotlight for investors and analysts. Renowned analyst Benjamin Cohen has presented a forecast that suggests a potential 50% drop in Bitcoin's price before the upcoming halving event. Let's examine this forecast and the basis on which it is built.

Bitcoin halving is an event when the rewards miners receive for mining new blocks are halved. This event occurs roughly every four years and serves as a mechanism to control the supply of Bitcoin. Halving is also considered a positive factor for Bitcoin's price, as it reduces inflationary pressure on the market. The next halving is scheduled for April 2024.

Renowned analyst Benjamin Cohen has caught the attention of the crypto community by predicting a potential 50% drop in Bitcoin's price before the upcoming halving. He backs his forecast with historical data, citing previous market cycles. According to him, "I've observed this over the past few cycles. Everyone discusses halving, and it usually goes like this: Bitcoin drops by half in price before this event, and then people say, 'Oh, that's what this drop meant.'"

To support his forecast, Cohen turns to historical data, claiming that similar price drops have occurred before halvings. One such case is the 50% price drop in Bitcoin before the pandemic, after which a parabolic rise began. These historical data points lead the analyst to consider the possibility of a similar scenario in the current market cycle.

One of the main reasons for Cohen's bearish forecast is the decreasing liquidity in the cryptocurrency market. He notes that "liquidity is leaving the altcoin market," and this could affect Bitcoin. This reduction in liquidity may make Bitcoin more vulnerable to sharp price fluctuations.