Bitcoin halving: could it reach $170K per coin?

By Mikhail Karkhalev

How will the value of Bitcoin change before and after halving? Growth modelling reveals some very interesting patterns


The 2020 Bitcoin halving is the most anticipated event in the crypto industry. Some tend to think the halving will trigger a new cycle of Bitcoin rate growth, and there’s a perfeсtly reasonable explanation for that.

In conventional economic systems, a central bank is the one responsible for monetary policy and fiat rates. The regulator can pour money into the economy or withdraw it from circulation when needed.

There are many ways to do that, including foreign-exchange intervention, quantitative easing, raising or lowering interest rates on loans and deposits for commercial banks, devaluating fiat money, and many more. These tools allow the central bank to curb inflation and change the economic weather.

To create a new block, miners need to solve a mathematical problem, but it requires a lot of computing power. The block brings a reward for miners as a part of an algorithm, which in fact is Bitcoin (BTC). It takes four years to mine 210,000 blocks, and when the number is reached, the block reward is cut in half, which is eventually called halving.

Bitcoin is not controlled by any central bank or other entity. Instead, inflation is regulated by a cryptographic algorithm that records the time and number of each coin issued in the network. Every 10 minutes crypto miners produce a new block that stores information on new transactions in the network and keeps data on previous blocks.

However, the last coins mined could cost a fortune, as Bitcoin’s price might be around $1bn. In the meantime, transaction fees will become the main source of income for miners by that time.

Prior to the 2012 halving, miners received 50 BTC for each new block and later the reward was cut to 25 BTC. In 2016, the reward was down to 12.5 BTC. In May 2020, when the third halving occurs, it will comprise 6.25 BTC. In 2138, two years before the last Bitcoin will be mined, the last halving in history will take place. Following the event, miners will receive 0,000000005820766091 BTC as a reward for a new block. That won’t be a much noticeable reward.

To sum up, the main goal of halving is to increase the complexity of Bitcoin mining and the distribution of its emission for the next 130 years. Halving restrains hyperinflation, and makes Bitcoin more difficult to obtain, which has a positive impact on its value in the future. Therefore the crypto community is looking forward to a new halving, as they expect it to be followed by a new crypto bull run.

All of the details mentioned above are hardly breaking news for the experienced crypto traders. Still, there are three main questions that are of interest for the community:

  • How will Bitcoin act prior to halving?
  • Will there be an increase right after halving?
  • What will be the price of Bitcoin in the next 1.5-2 years?

Mikhail Karkhalev, analyst at regulated crypto exchange, has examined Bitcoin’s rate before and after halving for the 10 years since its launch and has discovered certain patterns. Based on these patterns, the analyst has built a Bitcoin growth model, which we now share.

Economic cycle

Charles Dow, an American journalist who created technical analysis, wrote that history always repeats itself. This applies not only to the stock markets, but to any economic model or system as well. The growth is always followed by the decline and the bottom, and the bottom indicates there will be growth and finally a peak. There are four main economic, or business, cycles:

● The Kitchin cycle (2 to 4 years)

● The Juglar cycle (7 to 11 years)

● The Kuznets cycle (11 to 25 years)

● The Kondratiev cycle (45 to 60 years)

This is what a cycle looks like:

That’s where it comes to the first interesting conclusion. The Kitchin cycle is a short-term economic wave that typically lasts 2 to 4 years. The creator of the model linked this period to the fluctuations in world gold reserves.

When Satoshi Nakomoto created Bitcoin, he developed a self-sustaining system that would be similar to gold mining and would allow it to reduce coin emissions every four years. Therefore, the entire economic cycle with its peak, recession, bottom and recovery patterns should take four years from halving to halving, which is quite similar to the Kitchin cycle.

Furthermore, there is a specific pattern typical for Bitcoin before and after each new halving. The scenario was always the same: peak, descending triangle (or recession), bottom, price recovery, and then halving.

Initially, the price surges to the peak levels following a bull market. After reaching its top, Bitcoin starts falling under rules described in the technical analysis model dubbed “the descending triangle.” Before plunging through the support level, the price bounces back a few times and then moves to the bottom after a breakdown.


Later the price is steadily getting back to the average derived from the previous peak. The remaining time period before halving is when the price moves in different directions, but by halving it returns to the average from the previous peak. After halving, Bitcoin gradually moves to growth and soon conquers a new peak. During the remaining period Bitcoin is trading sideways, but prior to halving it is normally getting back to the average. As halving occurs, Bitcoin starts growing again, and then a new peak comes.

Bitcoin saw its first peak ($32) in June 2011, immediately followed by a recession. The fall happened within the framework of the descending triangle. The prices were constantly decreasing, and the support line was around $8. After the breakdown the price rushed to the bottom of $2. Then the recovery process started and the price went back to the average values around $15. Before halving, the coin was trading sideways, but on the day of halving (November 28, 2012) it was $12.25, which was close to the average rate. 13 months after halving Bitcoin reached its new peak.


The pattern was pretty much the same during the next period from December 2013 till July 2016 (peak – descending triangle – bottom – recovery to the average – halving – peak). At that time the peak price was at $1,177, the bottom at $163, and the average at $784. Just before halving the price was around $665. During 17 months after the halving Bitcoin reached its peak again.


Bitcoin price before the 2020 halving

In December 2017, Bitcoin reached its all-time high of $19,794, followed by the recession, bottom at $3,148 and recovery. The average price derived from the previous peak is at $13,830. If the model described above is correct, prior to halving the price will get back to $12,000. But why?

The difference between the recovery price and the price on the day of halving is usually between 9 and 10 per cent. In 2012, the recovery price was $15, which represents 46.87 per cent from the previous peak ($32). The price on the day of halving was $12, or 37.5 per cent from $32. The difference between the two marks ​​is 9.37 per cent.

In 2016, the recovery price was $784, or 66.6 per cent from the previous peak ($1,177). The price on the halving day was $665, or 56.49 per cent from it. The difference between them ​​is 10.11 per cent.

Bitcoin growth model

Taking the idea to its logical conclusion, $13,830 represents 69.86 per cent of the previous peak ($19,794). By the time of the halving, the price will climb approximately to 59.8-60.8 per cent from the peak, or $11,836-$12,034. It corresponds with the resistance level of $12,000, which opens a new path to growth for Bitcoin.

By combining all the mentioned observations in one picture, we obtain a possible Bitcoin growth model that predicts a new peak after the 2020 halving.

Bitcoin first demonstrated a visible price surge in 2010, when the rate reached 50 cents per coin. The second peak, as we have already mentioned, was at $32, which is 64 times more than the previous one. The third peak was at $1,177, which is 36.8 times more than $32. The fourth peak ($19,794) is 16.8 times higher than the peak of $1,177. Note that the pace of growth actually halves in each cycle:

  • The ratio of the growth between the first and second peaks and the second and third peaks is 1.74 (64 / 36.8 = 1.74)
  • The ratio of the growth between the second and third peaks and the third and fourth peaks is 2.19 (36.8 / 16.8 = 2.19).

To calculate Bitcoin’s price at the new peak, it is necessary to find the average of these two ratios:

(1.74 + 2.19) / 2 = 1.965.

Therefore, if the last growth (16.8) decreases by 1.965, the next time the growth will be x8.55.

$19,794 x 8.55 = $169,238 – the next Bitcoin peak

According to the stats, the growth begins almost immediately after the halving, but the price moves gradually. The historical maximum is normally updated in 5 to 7 months. After a moderate correction, which lasts several weeks, the growth goes on, moving the price to a bull run during the year, and then finally a new peak is reached. Based on this pattern, it is logical to expect a new historical maximum by the end of 2020. Meanwhile, a new peak could come in 18 months, or by the end of 2021.


According to all the calculations made, the following conclusions can be made:

  • The stats show that on the day of halving the price is hovering around the average derived from the previous peak. It means that in May 2020 it might range from $11,836 to $12,034 per Bitcoin.
  • Growth begins almost immediately after the halving, but the progress is gradual. The new historical maximum will be registered only in 5 to 7 months.
  • If these observations are correct, in 18 to 20 months after the 2020 halving the price of Bitcoin might reach $169,238.

Please note that the model described above represents a personal opinion of Mikhail Karhalev, analyst at The conclusions made in the article should not be perceived as an ultimate truth. Moreover, they cannot serve as a call to action. Traders should remember that cryptocurrencies are extremely volatile and the price of the particular asset might change unpredictably.

It is worth noting that the author of this model is holding Bitcoin, as well as other cryptocurrencies, such as Ethereum, Litecoin, XRP, Waves and Tron.

FURTHER READING: Where to store Bitcoin

FURTHER READING: Is Chinese New Year the time to buy Bitcoin?

FURTHER READING: Trading Bitcoin for beginners

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