The cryptocurrency market saw a massive correction in the past two days, starting with a red Friday and followed by a Saturday massacre.

While the reasons are still debated, even though they seem to be external and not related to the industry itself, the fact is that the total market cap shed over $400 billion at one point.

With the next Bitcoin halving, an event typically regarded as a catalyst for future price increases, just around the corner, the question arises whether this was the last substantial correction before the block production is reduced by another 50%.

Was This Correction Normal?

As reported during the weekend, Bitcoins price first tumbled from $71,000 to $65,000 before another leg down drove it south to a multi-week low of around $61,000. The first decline was blamed on the latest US Federal Reserve statements, while the latter was related to the escalating tension in the Middle East and Irans retaliation against Israel, in particular.

The reasons are whatever they are, but the fact is that BTC slumped by about ten grand. The altcoins suffered even more, with numerous double-digit losers on a 24- and 48-hour scale. The total crypto market cap plunged by roughly $460 billion since Friday morning to the low on Saturday evening.

History shows that BTCs price had corrected ahead of previous halvings as well, and some analysts called it normal. BitMEXs founder, Arthur Hayes, also envisioned something similar transpiring.

#BTC is down 16% from the highs.

So far, this is a normal drop. In fact, we’ve had several 20-22% drops this cycle.

BUT

This time it could develop into something more.

Thread pic.twitter.com/Y1hanTHwvl

Recovery?

This is not BTCs first such reaction amid escalating geopolitical tension between two nations. Recall that the asset slumped hard over two years ago when Russia invaded Ukraine. According to Willy Woo, the cryptocurrency recovered almost all losses within days.

#BTC down 10% immediately at the outbreak of the Iran Israel war.

Pulling up this old chart I did at the outbreak of the Russia-Ukraine war, also down 10%. Recovery happens within days. pic.twitter.com/PmusLrbtRZ

Alex Kruger believes Bitcoins upcoming price movements are strongly related to what Israel (and Iran) will do next. BTC could recover swiftly if the conflict is put down, but he warned that we are going much lower if an all-out war breaks out.

Iran attacked Israel. Wild volatility again . This is not about neither charts nor fundamentals. This is about war, headlines, and managing risk smartly. If war escalates, we are going much lower. If there is no follow-up from Israel, we recover the entire dump. Hard to imagine… pic.twitter.com/BqYtVCORrG

Looking Ahead

This substantial correction allowed certain savvy investors to strengthen their BTC stash. Lookonchain data shows that whales have been particularly active, with one withdrawing nearly $40 million worth of BTC. They have been quite active in the past month, perhaps loading up ahead of the upcoming halving.

This whale withdrew 598 $BTC($37.78M) from #Binance again after the market dropped.

Since the $BTC price dropped from its peak on Mar 14, this whale has withdrawn 10,158 $BTC($680.83M) from #Binance at an average price of $67,026.

Address: 1L7gnfBJhK9ZwUcw2Lx93BPHmcd1tsxeTs pic.twitter.com/rgspysCSWc

The event takes place at every 210,000 blocks (appr. four years) and reduces the block production by 50%. The next one, which should be completed on April 19, will see the rewards decline to 3.125 BTC per block.

Once the production rate of a certain asset declines, its price should go up if the demand for it remains the same or increases. Perhaps this is why Bitcoin has headed north after each of the previous halvings and why the community anticipates upcoming bul runs as well. Most predictions see BTC soaring to somewhere between $150,000 and $200,000 within the next year or so.

Nevertheless, we should know that history is no indication of future price performances. What we know for certain is that Bitcoin dropped by $10,000 just five days ahead of its halving what remains to be seen is whether that is a buy-the-dip opportunity or just the start of an even bigger retracement.