What will the halving event do to the Bitcoin price? – The Armchair Dealer

The cryptocurrency market is immersed in anticipation and speculation as a pivotal event approaches: the Bitcoin halving. This process, scheduled in the next 48 hours, involves halving the rewards miners receive for creating new blocks.

With each halving, the supply of Bitcoin decreases, which historically has a significant impact on its price and overall market dynamics.

On Wednesday, April 17, 2024, Bitcoin experienced a notable decline, reaching the $60,000.00 zone just before the expected halving date. This decline, which takes Bitcoin to its lowest level since February 2024, can be interpreted as investors anticipating the upcoming events. Expectations surrounding the halving are high, as many see this event as a catalyst for Bitcoin and other digital assets.

Bitcoin halving is expected to happen today – Friday – or Saturday. This will depend on the rate at which new BTC is minted by miners.

“Despite being one of the biggest moments in crypto, the halving probably won’t move the needle too much in terms of values,” said Nigel Green, CEO of deVere wealth management group. “Indeed, it will probably be a big prize event. Investors, traders and speculators priced in the halving months ago. As a result, a significant portion of the positive economic impact was previously experienced, which pushed prices to new all-time highs last month.”

After the first halving in November 2012, Bitcoin’s price soared about 9,500% to a high of $1,160 over 367 days. The 2016 halving sent the price up 3,040% over 562 days to 19,660, and the 2020 halving sent it up 802% to a peak of $73,800 over 1,403 days.

Will Halving Be Good for the Bitcoin Price?

However, it is important to recognize that the halving is not necessarily a period of celebration for investors. Contrary to popular belief, this event can be overshadowed by significant profit-taking by investors, who tend to sell their positions by this date. This trend could put downward pressure on the price of Bitcoin, even amid optimistic expectations about its future value.

“Previous Bitcoin halvings have followed a clear sequence: pre-halving boom, volatility, then a prolonged bull run,” said David Doss, founder and managing director at CKC Management, a specialist digital asset fund manager in the US. “We have seen the first (shorter) phases in this pattern: pre-halving boom and choppy pullback. Experts now expect the longer phase: $100K to $200K+ Bitcoin within 6-18 months. Now, savvy investors are flocking to actively managed hedge funds for their liquidity, agility and superior risk-adjusted returns.”

There may even be a temporary sell-off as investors use a ‘sell the news’ strategy. Those following the sell the news strategy take advantage of this anticipation by buying the asset before the news is released, hoping to capitalize on the price increase that led to the event.

“While many expect a rise in prices after the halving, the reality is less straightforward,” said Manu Choudhary. CEO at DeFinity Markets, an exchange for digital assets. “Historical data shows that past halvings have not consistently led to immediate upside trends. Some saw initial price declines followed by later rallies, while others experienced increases long before the event itself. It is crucial to recognize that the halving may not directly cause a price increase. Bitcoin’s price is affected by various factors such as regulatory changes, institutional adoption rates and overall market sentiment. The halving is more likely to act as a catalyst, shaping investor perception and possibly contributing to a price increase within broader market dynamics.

Choudhary said his expectation was that there would be a BTC selloff after the halving.

The Bitcoin halving is a phenomenon that occurs approximately every four years, and its impact on the cryptocurrency market is the subject of intense scrutiny and debate among analysts and financial experts. It is expected that, with the decrease in Bitcoin supply, its value will get a boost, but the market reality may be much more complex than theories suggest.

“In this context, it is crucial to consider other factors that influence the price of Bitcoin,” said Ernesto Di Giacomo, a market analyst at CFD broker XS.com. “For example, the strength of the US dollar has put pressure on cryptocurrency markets in recent weeks. Strong inflation and retail sales data in the United States have given the Federal Reserve little reason to consider interest rate cuts, negatively impacting market sentiment toward Bitcoin and other cryptocurrencies.

The Bitcoin halving is an event that generates both high expectations and intense speculation in the cryptocurrency market.

“As we approach this important date, investors are evaluating a range of variables to understand and predict price movements in the market,” said Di Giacomo. “While the halving promises significant changes, it is essential to also consider other external factors that may affect the dynamics of the cryptocurrency market in the coming days and weeks.”