One of the most anticipated events of 2024 – the approval of spot Bitcoin ETFs in the United States, contrary to opinions, turned into a sale of the coin. Between January 11 and January 23, BTC fell in price by more than 20%. It took the cryptocurrency a month to return to the levels at which spot Bitcoin ETF trading began. The market is ahead of the BTC 2024 halving.
The editors of The VR Soldier decided to find out whether the event, like the start of trading in spot Bitcoin ETFs, will become sell the news – news on which it is worth selling the cryptocurrency due to assumptions that it has reached a local maximum.
How Bitcoin Reacts to Halving
Halving is a halving of the speed of mining (extraction) of cryptocurrency. In the Bitcoin network, halving occurs every 210 thousand mined blocks (approximately once every four years). Each time, the event brings BTC to new highs in value, and here’s why: Bitcoin emissions are limited. A total of 21 million coins will be mined; Thanks to halvings, the rate of influx of new bitcoins into the market is halved. At the same time, demand remains the same. Thus, halvings create a shortage of cryptocurrency, which pushes its rate up.
The easiest way to visualize the impact of the halving on BTC is using a rainbow chart. Blue vertical lines indicate halvings, and the black curve indicates the Bitcoin rate. The rainbow itself allows you to understand whether a coin was expensive (red zone) or cheap (blue zone) at each time interval.
There have already been three halvings in the history of Bitcoin. Let’s consider the cryptocurrency’s reaction to an event a month before and a month after.
Bitcoin Halving History
During the month before the event, the cryptocurrency rose in price by 18%. The month after the halving, Bitcoin also showed positive dynamics, rising in price by almost 8%. After the 2012 halving, Bitcoin never returned to the levels at which the coin met the event.
BTC also spent the month before 2016 halving in growth. During the period, the cryptocurrency rose by almost 14%. In the month following the halving, BTC dropped in price by more than 12%.
The cryptocurrency dropped to a local minimum of almost -30% of the value on the day of halving two months later. After that, BTC did not return to the affected levels. During the month before the 2020 halving, Bitcoin rose in price by 23%. During the month after the event, BTC also showed positive dynamics (+16%).
Its notable to mention that Bitcoin has never returned to the levels at which the 2020 halving was recorded.
What About The Results?
It turns out that in two out of three times – against the background of the halvings of 2012 and 2020 – Bitcoin grew during the month before and the month after the event. At the same time, the cryptocurrency never returned to the levels at which it encountered a halving of the mining speed. The editors of The VR Soldier found out the opinions of experts about which scenario is most likely this year.
Expert Opinions
OKX Commercial Director Lennick Lai did not rule out a fall in BTC due to the event. Our interlocutor drew attention to the fact that as a result of the halving, miners’ income, consisting of network rewards, will be halved, and this may push miners to sell previously mined coins in order to cover increased operating costs.
“In this case, additional coins will enter the market, which will put pressure on the price of Bitcoin and restrain its growth,” he noted.
Despite the fact that BTC did not go into correction two out of three times after previous halving beings, this year the situation may change. The negative scenario voiced by expert interlocutors does not exclude a decline in Bitcoin to $33 thousand. At the same time, a correction after halving may open up a good opportunity to purchase cryptocurrency at an attractive price before the coming wave of growth, the onset of which none of the experts we interviewed doubts.
At The End
According to the experts interviewed by the editors of The VR Soldier, against the backdrop of the 2024 halving, Bitcoin may enter a correction. This forecast can be explained by the fact that an event, like the approval of spot BTC ETFs in the USA, can become a sell the news.
Our analysts also explained the likelihood of a sale of bitcoins against the backdrop of halving due to possible pressure on the cryptocurrency from miners. Due to the event, their income will be halved. Miners may bring some coins to market to cover increased operating costs. Our interlocutors also noted that expectations from halving may already be included in the price of the cryptocurrency.
