Analysis and Trends of Bitcoin’s Behavior Following Halving
Is Bitcoin’s price set to rally after the halving, or are there obstacles that could hinder its upward momentum? The highly anticipated fourth Bitcoin halving event has finally occurred, marking a significant milestone in BTC’s journey. Halving events occur approximately every four years and result in a 50% reduction in the number of Bitcoins awarded to miners. Following this recent halving, the block reward has decreased from 6.25 BTC to 3.125 BTC per block.
Despite the halving, Bitcoin is currently trading relatively flat. As of April 23, the price of Bitcoin is around $66,500, representing a 3.5% gain in the past 24 hours. The halving block, which was the 840,000th block on the Bitcoin network, was successfully mined by ViaBTC, earning the miner over 40 Bitcoins, equivalent to more than $2.6 million in block rewards and fees.
Now that the halving is behind us, attention turns to what lies ahead for Bitcoin. Where will its price go, and what can we expect in the coming days? Let’s explore these questions to gain a better understanding of Bitcoin’s post-halving situation.
Where could Bitcoin’s price go next? As Bitcoin enters its post-halving phase, several key indicators provide insights into its potential direction. Recent data from a Bitfinex report shows a significant increase in BTC outflows from centralized exchanges, reaching levels not seen since January 2023. This surge suggests a shift in investor behavior towards accumulation, driven by the anticipation of price appreciation following the halving event.
Furthermore, analysis of Bitcoin supply movements reveals a transitional phase characterized by a decline in activity among long-term holders (LTHs) and an increase in transactions involving newer investors. This decrease suggests that LTHs may be taking advantage of profits. On the other hand, the Market Value to Realized Value (MVRV) ratio for short-term holders (STHs) remains below historical peak thresholds, indicating potential room for further growth due to the influx of newcomers.
The successful absorption of supply from LTHs could strengthen the bullish outlook for Bitcoin and support critical price levels from a structural standpoint. However, the likelihood of this scenario remains uncertain.
Will the price of Bitcoin increase? Traditionally, Bitcoin prices have experienced upward momentum for months after a halving event. However, this time, there may be a deviation from the norm due to several key factors. One significant difference is the compressed nature of the price cycle surrounding this halving. Unlike previous cycles, Bitcoin has already witnessed substantial surges and reached new record highs before the halving, which may alter the typical post-halving gains.
Additionally, regulatory approvals for Bitcoin investment products, such as spot Bitcoin ETFs, have injected optimism into the market. The recent approval of ETFs in Hong Kong, along with previous approvals in the U.S., has facilitated regulated retail investment in Bitcoin, potentially reducing market volatility.
However, there are concerns about inflation. Bank of America projects inflation to reach 4.8% by the 2024 election, which could impact the value of the dollar. Strong CPI figures may lead to delayed rate cuts, strengthening the dollar and potentially impacting demand for Bitcoin as investors turn to traditional assets.
Furthermore, the high living costs and inflation levels in countries like Argentina and Turkey could limit investors’ disposable income and dampen their willingness to heavily invest in Bitcoin.
Given the economic and geopolitical uncertainties, investors should exercise caution when allocating large capital to Bitcoin.
What can we expect next? Analysts have varying predictions and observations about Bitcoin’s next moves. Some are eyeing ambitious targets, such as a range of $80,000 to $85,000, while others remain cautious, noting a target of $58,000 that has yet to be reached.
Renowned analyst Michaël van de Poppe described this halving as “the most boring price action,” but he sees it as a positive sign, suggesting that altcoins may take center stage in the next phase of market development.
While excitement and optimism prevail, it is crucial to exercise caution and never invest more than you can afford to lose.
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