Post Bitcoin Halving: Scarcity Sparking Next Bull Run?
News provided by PRCrypto
Author: Max Kalmykov, CEO Bitsgap
Occurring approximately every four years, Bitcoin's upcoming halving in April 2024 will reduce its new issuance rate by 50% overnight. With miners rewards slashed while coin scarcity spikes, the stage appears set for the next supply-shock bull market. Or does it?
Reviewing history, significant appreciation has followed every halving event. Both 2012 and 2016 saw minor initial dips before torrential uptrends kicking off the most parabolic rallies ever — new highs up to 8,800% above prior peaks. And 2020 played out similarly, with values exploding 548% post-halving.
Will this exponential trajectory continue, catalyzed by the precisely scheduled supply squeeze? If prior macro bull-bear cycles repeat, we could witness history's most aggressive Bitcoin growth phase ignite in 2024.
Of course, past performance never guarantees future returns, and analysts caution that this time could be different. Given the US dollar’s decade-plus strength, pressuring risky assets, and Bitcoin's recent lackluster oscillations, it’s tough to predict what direction things will take from here. Nonetheless, in the analysis that follows, I will try to address these and other pertinent questions related to this pivotal moment and explore potential market directions.
So far, prices corrected 16% from that zenith, testing supports around $61,500. But past halvings saw 18-23% comedowns as mining rewards tapered. Some analysts now expect even deeper consolidation if investor momentum stalls after the long anticipated slashing.
Yet with the event days away, drastic short-term moves seem unlikely. Prices likely range-trade in the interim, as investors anxiously speculate on whether Bitcoin's bull run will continue.
Even if we look at Bitcoin chart now (Pic. 1), analyzing key indicators offers little clarity. Bollinger Bands have narrowed, implying lowered volatility likely to persist pre-halving. Meanwhile the RSI hovers at 50 with no overbought or oversold signals — indicating similarly range-bound conditions ahead.
While short-term direction remains murky, the markets' compression suggests a major move brews beneath the surface. Such a significant shock could induce heavy volatility. So uncertainty dominates, but potentially extreme price swings follow.
Given unpredictable variables, projections for post-halving prices remain uncertain. Some anticipate steadier, more mainstream growth trajectories going forward. Others see short-term bearishness around the event before medium-term bullishness resumes.
For instance, in a recent episode of the "Unchained" podcast, Arthur Hayes of Maelstrom and Will Clemente from Reflexivity Research took a somewhat cautionary approach. While both still foresee upside past initial turbulence, Hayes advises cautious positioning around the halving itself when liquidity normally evaporates. He even suggests avoiding trades altogether until after May 1st when some clarity resumes.
With the Dow Jones dropping 1.34% week-over-week, prominent crypto skeptic Peter Schiff also jumped in on the opportunity to highlight Bitcoin’s lackluster results, noting how it failed to act as an inflation hedge or safe haven asset. He further commented that gold and silver have powered higher recently, signaling "the return of sound money" while encouraging followers to rotate out of underperforming crypto in favor of the rallying metals instead.
Then, there are miners who are expected to potentially liquidate up to $5 billion worth of BTC after the halving, according to projections by Markus Thielen of 10x Research. The resulting wave of selling pressure may suppress prices for 4-6 months following the supply adjustment. Thielen believes altcoins could experience particular weakness in this environment as speculative assets tend to suffer most amidst market uncertainty. If Bitcoin trends sideways under weight of capitulating operations, risky altcoins may face existential tests — especially if macro conditions also worsen.
Considering the myriad complex forces at play, I believe Bitcoin's post-halving path remains likely volatile. This time may see initial miner capitulation spark downward pressure before stabilizing and consolidating.
Rather than drastically bearish or bullish outlooks, a prudent perspective incorporates potential risks around miner profitability and macro liquidity with longer-term adoption tailwinds. I expect turbulent range-bound trading rather than any sudden crash to zero or surge to $200k.
Ultimately short-term projections prove futile with so many variables at stake. More important is crafting intelligent trading strategies to navigate uncertainty. Platforms like Bitsgap can help spot opportune entry and exit signals within the expected volatility using automation.
By bracing for two-sided price swings while using tools to capitalize on both, investors can thrive regardless of whether Bitcoin bulls or bears dominate post-halving. The key is maintaining flexibility amidst the frenzy.
Occurring approximately every four years, Bitcoin's upcoming halving in April 2024 will reduce its new issuance rate by 50% overnight. With miners rewards slashed while coin scarcity spikes, the stage appears set for the next supply-shock bull market. Or does it?
Reviewing history, significant appreciation has followed every halving event. Both 2012 and 2016 saw minor initial dips before torrential uptrends kicking off the most parabolic rallies ever — new highs up to 8,800% above prior peaks. And 2020 played out similarly, with values exploding 548% post-halving.
Will this exponential trajectory continue, catalyzed by the precisely scheduled supply squeeze? If prior macro bull-bear cycles repeat, we could witness history's most aggressive Bitcoin growth phase ignite in 2024.
Of course, past performance never guarantees future returns, and analysts caution that this time could be different. Given the US dollar’s decade-plus strength, pressuring risky assets, and Bitcoin's recent lackluster oscillations, it’s tough to predict what direction things will take from here. Nonetheless, in the analysis that follows, I will try to address these and other pertinent questions related to this pivotal moment and explore potential market directions.
Markets in limbo
Bitcoin's latest peak broke new ground, cresting before its upcoming halving event for the first time. Typically, the programmed supply shock spurs renewed bullish fervor. However, March 13th’s all-time high of $73,679 already front-ran expectations, leaving markets uncertain if more fuel remains for post-halving buying.So far, prices corrected 16% from that zenith, testing supports around $61,500. But past halvings saw 18-23% comedowns as mining rewards tapered. Some analysts now expect even deeper consolidation if investor momentum stalls after the long anticipated slashing.
Yet with the event days away, drastic short-term moves seem unlikely. Prices likely range-trade in the interim, as investors anxiously speculate on whether Bitcoin's bull run will continue.
Even if we look at Bitcoin chart now (Pic. 1), analyzing key indicators offers little clarity. Bollinger Bands have narrowed, implying lowered volatility likely to persist pre-halving. Meanwhile the RSI hovers at 50 with no overbought or oversold signals — indicating similarly range-bound conditions ahead.
While short-term direction remains murky, the markets' compression suggests a major move brews beneath the surface. Such a significant shock could induce heavy volatility. So uncertainty dominates, but potentially extreme price swings follow.
Post-halving boom. Or bust?
Ultimately, Bitcoin’s value emerges from a complex interplay of factors — not just the scheduled halving. ETF approvals drove record capital inflows, revealing surging institutional demand. Macro liquidity cycles, tax policies, quantitative tightening, and investor sentiment all contribute as well. For instance, as inflation concerns mounted and rate hike odds strengthened, Bitcoin also stagnated alongside struggling equity markets over the past week.Given unpredictable variables, projections for post-halving prices remain uncertain. Some anticipate steadier, more mainstream growth trajectories going forward. Others see short-term bearishness around the event before medium-term bullishness resumes.
For instance, in a recent episode of the "Unchained" podcast, Arthur Hayes of Maelstrom and Will Clemente from Reflexivity Research took a somewhat cautionary approach. While both still foresee upside past initial turbulence, Hayes advises cautious positioning around the halving itself when liquidity normally evaporates. He even suggests avoiding trades altogether until after May 1st when some clarity resumes.
With the Dow Jones dropping 1.34% week-over-week, prominent crypto skeptic Peter Schiff also jumped in on the opportunity to highlight Bitcoin’s lackluster results, noting how it failed to act as an inflation hedge or safe haven asset. He further commented that gold and silver have powered higher recently, signaling "the return of sound money" while encouraging followers to rotate out of underperforming crypto in favor of the rallying metals instead.
Then, there are miners who are expected to potentially liquidate up to $5 billion worth of BTC after the halving, according to projections by Markus Thielen of 10x Research. The resulting wave of selling pressure may suppress prices for 4-6 months following the supply adjustment. Thielen believes altcoins could experience particular weakness in this environment as speculative assets tend to suffer most amidst market uncertainty. If Bitcoin trends sideways under weight of capitulating operations, risky altcoins may face existential tests — especially if macro conditions also worsen.
Considering the myriad complex forces at play, I believe Bitcoin's post-halving path remains likely volatile. This time may see initial miner capitulation spark downward pressure before stabilizing and consolidating.
Rather than drastically bearish or bullish outlooks, a prudent perspective incorporates potential risks around miner profitability and macro liquidity with longer-term adoption tailwinds. I expect turbulent range-bound trading rather than any sudden crash to zero or surge to $200k.
Ultimately short-term projections prove futile with so many variables at stake. More important is crafting intelligent trading strategies to navigate uncertainty. Platforms like Bitsgap can help spot opportune entry and exit signals within the expected volatility using automation.
By bracing for two-sided price swings while using tools to capitalize on both, investors can thrive regardless of whether Bitcoin bulls or bears dominate post-halving. The key is maintaining flexibility amidst the frenzy.