Bitcoin has generated a lot of buzz in social media discussions as traders speculate on the benefits of holding through a potential prolonged correction following the halving. Despite persistent FUD causing liquidations, attention remains on BTC and Fiat. Conversely, the altcoin sector, encompassing AI, gaming, DeFi, and meme coins, has seen significant retracement, redirecting focus to Bitcoin.
What’s unique about this halving is that the price has increased before the event, which is expected to take place on April 19 or 20. After the halving, the potential balance sheet of each Bitcoin miner is reduced by half. Additionally, the upcoming halving is expected to bring down the coin’s annual inflation rate from 1.73% to 0.85% due to the reduction in new block rewards from 6.25 to 3.125 BTC. At the current price, roughly $11 billion of new annual supply is set to be removed from the market.
Historically, the halving has been beneficial for Bitcoin’s price in the long term. Here’s the breakdown of the impact of BTC halving on price:
| Year of Halving | % Change in Price (1 Month After) | % Change in Price (1 Year After) |
|---|---|---|
| 2012 | +9% | +8,839% |
| 2016 | -10% | +285% |
| 2020 | +6% | +548% |
Despite indications of a robust economy, the Federal Reserve is expected to go ahead with plans to cut rates this year, because short-term interest rates are well above policymakers’ estimates of “neutral”. However, Grayscale Research contrasts the FED’s cautious outlook, highlighting the favorable supply/demand technicals due to the halving, which could be consistent with further increases in Bitcoin’s price this year.
Bitcoin: Technical Analysis and Market Sentiments
IntoTheBlock’s technical indicators showed Bitcoin hovering above a crucial demand zone. Close to 1 million addresses bought over 530k BTC tokens at an average price of $64.3K. This price threshold could act as a significant demand zone, offering major support for the coin’s value.
However, not all analyses are uniformly positive. There are looming concerns that this support level might ultimately break down. Market experts suggest the next major demand zone will be near the $56k mark, indicating the price may continue to decline.