Bitcoin (BTC) halving is an event where the reward for mining a BTC block is reduced by half every 210,000 blocks, approximately every four years. As this event is just under 70 blocks away, the BTC price has rallied from its recent low of below $60,000 on Wednesday, targeting a retest of the $65,000 mark. Nevertheless, there could be a potential selloff following the halving due to a growing ‘sell the news’ sentiment.
Here’s How BTC Price Might React
Experts suggest there may be an immediate “buy the rumor, sell the news” impact on Bitcoin’s price surrounding the halving event. Vetle Lunde, a senior analyst at K33 Research, believes that the effects of reduced BTC issuance will take months to manifest, and therefore does not anticipate a significant rally either before or immediately after the halving.
This view is supported by analysts at Deutsche Bank, who note that the market has likely already partially accounted for the Bitcoin halving. They do not expect a substantial price increase following the event, given its anticipation due to the predictable nature of Bitcoin’s algorithm. Looking forward, they expect Bitcoin prices to remain higher, influenced by expectations of future regulatory changes, potential central bank rate cuts, and approvals for spot Ethereum ETFs.
Data from CryptoQuant shows that big investors and Exchange Traded Funds (ETFs) are buying less Bitcoin. This reduction is probably due to worries about the market and upcoming changes from the Bitcoin halving event.
Analysts anticipate a potential Bitcoin price dip to $62,000 post-halving due to short-term selling by miners. Yet, this drop could spark investor interest, leading to a subsequent price rebound.
Experts’ View On Bitcoin Price
Binance CEO Richard Teng noted that historically, Bitcoin has seen significant price increases in the six months following each halving event. He added that Bitcoin has achieved new all-time highs in the four-year intervals between previous halving events.
Every time a Bitcoin halving event is near, people often discuss whether its effects are already factored into the price. Unlike previous cycles, Bitcoin reached a new high of $73,836 just before the fourth halving on March 12, leading analysts at the cryptocurrency exchange Coinbase to suggest earlier this month that the halving might have been priced in.
Investment bank JPMorgan does not anticipate increases in Bitcoin prices following the halving, as they believe these effects have already been considered in the market prices. They also noted potential reasons for expecting a decrease in Bitcoin prices after the halving.
Greg Beard, CEO of Stronghold Digital Mining, stated that while some base their predictions of rising Bitcoin prices on technical analysis, he focuses on the fundamental principles of supply and demand, which lead him to similarly promising conclusions.
Bitcoin may be overbought, analysts say, but John Glover, CIO at Ledn, urges patience regarding the market impact of reduced supply.