Bitcoin's Price Plunge May Be Just Another Halving Cycle

Bitcoin's price has taken a significant hit in recent months, dropping from its record high of around $126,080 in October to trade in the low-$60,000s. This decline represents a nearly 50% drop in value, causing concern among investors.

However, according to VanEck, this downturn may be part of Bitcoin's normal market structure rather than an unusual event. The asset manager points out that Bitcoin's current slump tracks the asset's historical four-year halving cycle, where mining rewards are periodically cut in half, tightening new supply and often preceding a bear phase.

VanEck's GEO framework currently shows two of three signals reading neutral, with ecosystem leverage in constructive territory. This combination suggests early signs of a bottom forming, and it may be time to begin scaling into positions.

CryptoQuant also points to on-chain data showing that long-term Bitcoin holders are now sitting on deeper unrealized losses than the market overall. However, analyst MorenoDV notes that this dynamic has shown up at every prior major cycle bottom, and caution is urged against declaring a bottom prematurely.

While the current readings haven't reached the extreme negative levels seen in past cycles, CryptoQuant warns that the biggest cryptocurrency could still face one more sharp capitulation move before a true low is reached.