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Buy Bitcoin Six Months Before the Halving and Sell 24 Months After, Says Renowned Analyst

3 mins
Updated by Michael Washburn
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In Brief

  • Plan B introduced a potentially lucrative Bitcoin trading strategy that centers on the four-yearly halving cycle.
  • This trading strategy aims to outperform and capitalize on Bitcoin's scarcity-induced price surges and avoid bear markets.
  • The upcoming Bitcoin halving in April 2024 could be another profitable opportunity despite potential black swan events.
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Renowned Bitcoin analyst Plan B has recently revealed an innovative trading strategy. He claims it could yield profits significantly surpassing those achieved by simply buying and holding Bitcoin.

Plan B’s new trading strategy revolves around the Bitcoin halving, garnering attention for its significant returns.

A Trading Strategy Around the Bitcoin Halving

The Bitcoin halving is an event that occurs approximately every four years. It has historically sparked significant price increases due to a 50% reduction in the rate new BTC can be mined.

These events create a surge in scarcity, which according to Plan B, these periods offer an optimal opportunity for savvy investors.

Plan B’s model, dubbed the “Stock-to-Flow Trading Rule,” involves buying BTC six months before the Bitcoin halving and selling 18 months after the event. This trading strategy aims to exploit Bitcoin’s cyclical behavior. Consequently, capturing the dramatic price increases often seen around the halving while avoiding the ensuing bear markets.

Bitcoin Stock-to-Flow Trading Rule.
Bitcoin Stock-to-Flow Trading Rule. Source: PlanBTC.com

The on-chain analyst drew comparisons between Bitcoin’s price trajectory and the results achieved by his strategy. In every case, the model outperformed Bitcoin’s price trend.

“Bitcoin is at $30,000, so the strategy [anticipates a] 4X in the Bitcoin price. We are awaiting the next Buy Signal and we know already that the halving will be around April 2024, so six months before that is around October…. Then [Bitcoin will] enter the market and will stay there for two more years until October 2025, 24 months later,” said Plan B.

Still, Plan B emphasized that the Stock-to-Flow Trading Rule is not a prediction model. Instead, it is a strategy that utilizes defined buy and sell rules to dictate market participation periods.

Bitcoin Market Cycle Plays a Pivotal Role

The implementation of this strategy requires a thorough understanding of the “Bitcoin Market Cycle.” According to Plan B, the model identifies the current stage as the “early bull market.”

The subsequent stage, where the significant price jumps occur, is anticipated to start around the next Bitcoin halving event, slated for April 2024.

Bitcoin Market Cycle
Bitcoin Market Cycle. Source: PlanBTC.com

As Bitcoin enters the final stretch before the next halving, traders are eagerly watching for signals indicating the late bull market phase. In previous cycles, the transition to the green stage began shortly after the Bitcoin halving, catalyzing an accelerated bull market.

Despite these encouraging historical trends, the upcoming Bitcoin halving’s outcome remains uncertain. Factors such as black swan events could delay or disrupt the expected price rally.

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Bary Rahma
Bary Rahman, a talented journalist, graduated from New York University with a degree in Journalism. Skilled in SEO, she has worked with CNN, showcasing her investigative skills and storytelling abilities. In addition to her journalistic accomplishments, Bary has contributed her expertise as a content writer for Binance, crafting insightful articles on the dynamic crypto industry. Her unique fusion of journalism and SEO makes her a versatile and highly respected figure in the industry.
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