possible scenarios after the halving

On April 20, the fourth halving in Bitcoin’s history took effect, which saw the block reward halved from 6.25 BTC to 3.125 BTC.

Usually the halving creates conditions for an increase in the price of the currency on the market, or at least that is what has happened in recent years.

What are the post-halving price predictions for Bitcoin in this cycle?

SPOILER: there is someone who assumes 150,000 USD

All the details below.

Bitcoin Price Prediction After the Recent Halving: Is the Path Clear to $150,000?

Last week, Bitcoin hit a new local low at 56,500 USD, breaking a divergent chart structure that began at the beginning of March 2024, then quickly regained the points lost in early May and returned above the price of 64,000 USD.

The canonical quadrennial event of the reduction of new issuances of the network, known in jargon as “halving”, did not immediately bring the desired effect of the community, especially considering the difficult prospects of the crypto that amid important geopolitical conflicts and macroeconomic tensions.

The result, unexpected by most forecasts, was a 21.7% pullback since the start of April. This bearish move is now the heaviest of this cycle, surpassing the September 2023 correction.

Indeed, the decline in recent days was accentuated by the increase in the labor cost index in the United States and the announcement by the Federal Reserve to continue to fight inflation without starting a quantitative easing policy that would reduce interest rates on government bonds will involve (possibly postponed to September)

Through it all, we also saw the launch of the Hong Kong Bitcoin spot ETFs, with data initially disappointing expectations due to low volumes recorded, which were later contradicted by statistics on the first day of trade inflows showing inflows (seed capital) of $292 million.

Driven by these dynamics, Bitcoin has struggled to find a price balance as miners prepare to face a season of halved earnings due to the protocol’s halving.

Despite all this, however, crypto seems to be setting the stage in a big way for a comeback, which will send it straight to record new all-time highs.

On the macro front, the cooling of the labor market gives hope that the FED can provide the necessary fuel for risk-on markets to face the second half of 2024.

From a more technical analysis and on-chain data perspective, we can see how the open interest, funding rate and liquidation data have undergone a recovery after the excessive speculation seen in the first quarter of the year, indicating a possible restart propose in the near future. future.

The halving effect, which reduces the supply of new coins by 50%, will have its effects in the coming months and may cause a supply shock if we also have an increase in demand pressure for spot ETFs in the US and Hong Kong.

In such a scenario, analyst Bernstein released his prediction for the Bitcoin bull market, which expressly states that the crypto will reach $150,000 as the cycle peak in the next year.

On-chain data from Bitfinex: reducing implied volatility

According to the analysis of the cryptocurrency exchange Bitfinex, after the halving, the implied volatility of Bitcoin decreased significantly, which only found a new acceleration in price fluctuations in the last few days.

In a context of graphic uncertainty weighed down by complex macroeconomic issues, as traders tried to establish a price balance for Bitcoin and other assets, the volatility index fell sharply, signaling the beginning of a phase of stagnation suggest the restart.

This is what was reported by Bitfinex analysts, who noted how this dynamic reflects a less alarming expectation of market participants.

“The halving of Bitcoin not only changed the supply mechanism of Bitcoin, but also played a decisive role in recalibrating the dynamics of the cryptocurrency market and investors’ expectations.”

It is clear that after the halving on April 20, it acted as an uncertainty resolution event, significantly affecting the volatility and market dynamics of cryptocurrencies.

In particular, the volatility index fell by 24.3%, falling from 74.54 points to 56.47 points in a few days. This change indicates the expected market sentiment regarding future price fluctuations, but it was not reflected by significant price movements, suggesting a stabilization effect.

Likewise, the implied volatility of Ethereum (EVIV) also decreased by 15.9 percent in the same period, from 61.94 points to 52.08 points, even if its price was more affected by an upward trend with predictions that the possibility of greater growth in ETH compared to BTC.

These declines indicate a lower degree of correlation between price levels and volatility, and a greater reduction in market uncertainty.

In summary, Bitcoin’s halving not only reduced the potential supply pressure by lowering the block reward, but also played a crucial role in recalibrating market dynamics and restoring investor expectations.

Now the market is healthy to start again and aim for the long-awaited $100,000 break.