Contrarian View: Why Bitcoin Price May Dump After 2020 Halving

In contrast, some of Bitcoin's charts show that the asset could possibly dump in the days following the halving historically, all-time highs have followed halving events in the long term.

Bitcoin completes a halving event approximately every four years, decreasing the supply of additional Bitcoin entering the market by 50%, acting as a type of deflationary event.

One might conclude that the added scarcity of Bitcoin, and its commonly referenced stock-to-flow model, might lead to a rise in price immediately after a halving event occurs.

On the halving date, the digital asset saw a sizeable wick up to $12.76, with the entire day's price action spanning approximately 6.47%. Bitcoin's price remained relatively quiet in the days immediately surrounding its first halving, especially considering the magnitude of the event.

Bitcoin did not decisively break through the $32 level until Feb. 28, 2013, several months after its first halving.

Bitcoin reached a high of $664 on July 9, 2016, the day of its second halving, shooting a wick down 5.66% to $626. The digital asset also saw a noticeable price increase followed by a retracement during the weeks leading up to its second halving.

The days after Bitcoin's second halving remained fairly calm until a sizeable tumble took the asset down to $466.20 on Aug. 2, 2016.In the weeks following, Bticoin did not close a daily candle above its July 9 halving day high until Oct. 27, 2016.BTC USD daily chart.

Bitcoin's 2016 halving ultimately took its price from $664 to almost $20,000, although the charts also included some bearish and sideways price action in that time period.

Bitcoin's 2012 halving did not show much downward or sideways action after the halving, while 2016 posted months of downward and sideways price activity.

2016 saw Bitcoin's price pump and retrace prior to its halving, while 2012's halving saw general volatility in the weeks prior to the event, followed by a gradual increase in price leading up to the halving event.