Bitcoin’s post-halving behavior: trends and analysis

Will Bitcoin’s price rise in the wake of the halving, or are there factors that could potentially hinder its upward momentum?

The long-awaited event, the fourth Bitcoin (BTC) halving, has finally happened, marking a new milestone in BTC’s journey.

A halving event occurs approximately every four years, resulting in a 50% reduction in the number of Bitcoins awarded to miners for validating transactions.

With this recent halving, the reward reduced from 6.25 BTC to 3.125 BTC per block.

After this latest halving, Bitcoin is trading relatively flat. As of April 23, Bitcoin is trading hands at $66,500 levels, representing a gain of 3.5% in the preceding twenty-four hours.

The 840,000th block on the Bitcoin network, the halving block, has been successfully mined by ViaBTC. This earned the miner more than 40 Bitcoins, equivalent to more than $2.6 million in block rewards and fees.

Now, with the halving behind us, the focus shifts to what lies ahead for Bitcoin. Where can the price go, and what can we expect in the coming days?

Let’s dig into these questions to get a clearer understanding of Bitcoin’s post-halving situation.

Where Could BTC Go Next?

As Bitcoin enters its post-halving phase, several key indicators offer insight into its potential direction.

Recent data from a Bitfinex report indicates a notable increase in BTC outflows from centralized exchanges, reaching levels not seen since January 2023.

This surge indicates a shift in investor behavior towards accumulation, driven by the anticipation of price appreciation following the halving event.

In addition, the analysis of Bitcoin supply movements reveals a transitional phase, characterized by a decrease in activity among long-term holders (LTHs) and an increase in transactions involving newer investors. This decline suggests that LTHs may be capitalizing on gains.

Meanwhile, the influx of newcomers is reflected in the market value to realized value (MVRV) ratio for short-term holders (STHs), which remains below historical peak thresholds, indicating room for further growth.

The successful absorption of supply of LTHs could strengthen the bullish outlook for Bitcoin, potentially reinforcing critical price levels from a structural point of view. However, the likelihood of this scenario remains uncertain.

Will the BTC price go up?

Traditionally, Bitcoin prices experienced months of upward momentum following a halving event. However, this time we can expect a deviation from the norm due to several key factors.

One notable difference is the compressed nature of the price cycle around this halving.

Unlike previous cycles, Bitcoin has already seen significant increases and even reached new record highs before the halving. This accelerated growth path may change the typical post-halving gains.

Meanwhile, regulatory approvals for Bitcoin investment products, such as spot Bitcoin ETFs, injected optimism into the market.

The recent approval of ETFs in Hong Kong, along with previous approvals in the US, has facilitated regulated retail investment in Bitcoin, potentially mitigating market volatility.

However, Bank of America predicts that inflation will reach 4.8% by the 2024 election, adding to concerns.

Recent CPI data, averaging 0.4% monthly inflation, points to a continued upward trend, possibly exceeding the Fed’s 2% target by a wide margin.

The possibility of delayed rate cuts due to strong CPI numbers could strengthen the dollar’s value. In such scenarios, investors may prefer traditional assets like the dollar over crypto, which affects the demand for BTC.

Furthermore, the lingering impact of the rising cost of living in various parts of the world, such as Argentina and Turkey, where inflation is at record high levels, may leave many investors with limited disposable income, dampening their willingness to invest heavily in Bitcoin.

As economic and geopolitical situations emerge, investors should remain cautious in allocating large capital to Bitcoin.

What to expect next?

Amidst wide-ranging sentiments, analysts are buzzing with predictions and observations about BTC’s next moves. Some are looking at ambitious targets, while others are cautious.

One analyst was steadfast in their focus on a large target range for Bitcoin: $80,000 to $85,000. However, they acknowledge that the potential for Bitcoin to climb even higher remains on the table.

Meanwhile, another analyst remains bearish in their analysis, noting the $58,000 target yet to be reached for Bitcoin.

In contrast, the well-known analyst Michael van de Poppe described this halving as “the most boring price action”.

However, he interprets this as a positive sign, suggesting that the muted volatility indicates the potential for altcoins to take center stage in the next phase of market development.

While excitement and optimism prevail, caution is essential. Remember, never invest more than you can afford to lose.