Many crypto traders expect the Bitcoin halving event to be a pivotal moment in 2024, that significantly impacts the crypto market. However, analysts at Steno Research anticipate that it will be a “buy the rumor, sell the news” event.
There have been three halving events in Bitcoin’s history , reducing miner rewards from 50 BTC to 25 BTC in 2012, then to 12.5 BTC in 2016, and 6.25 BTC at the last halving on May 11, 2020.
Steno Research says that BTC is likely to repeat 2016 halving where selling pressure piled up to four months later.
“We foresee the next Bitcoin halving as a short-term "buy the rumor, sell the news" event, echoing the 2016 halving’s pattern, this time around even with heightened anticipation from Bitcoin ETF holders,” the research firm stated.
Source: Steno Research
Steno Research expects a surge in BTC’s value leading up to the halving event . However, they say that the value could “dip below its price at the time of the halving” within the first 90 days following the halving.
Bitcoin: Post-halving returns, 90 days. Source: Steno Research
Steno Research analysts identified parallels between BTC price performance before and after the 2016 halving, indicating that similar outcomes can be expected from the upcoming event.
The report noted that Bitcoin’s price remained below its pre-halving level for the entire 90 days following the halving. “Specifically, on the 90th day post-halving, Bitcoin was priced 8.4% lower than before the halving,” Steno Analyst Mads Eberhardt wrote.
According to data from CryptoQuant, Bitcoin daily mining rewards are at their highest ever as the price trades close to its all-time high. This implies that even though the number of BTC issued will be the smallest yet, after the halving, the value of this issuance will be high when measured in dollars.
The report explained that with the current price at approximately $71,563, this reduction now translates to $224,512 worth of Bitcoin, compared to the $55,000 the miners received after the last halving.
“Bitcoin miners have never earned as much as they have in recent months.”
Bitcoin block rewards, USD. Source: CryptoQuant
As such, miners are likely to sell all their Bitcoin over time to cover the costs associated with their mining operations, the report noted. This then contributes to the sell-side pressure that causes BTC price to correct after months after the halving.
Further, the report explained that the halving is a bullish catalyst for Bitcoin’s price once selling pressure from miners reduces.
Eberhardt said,
“We believe the real bullish momentum of the halving will become apparent once the initial market adjustments have settled, and the “weak hands” – those investors who bought in anticipating quick gains, including some ETF investors – have exited.”
Another analyst, Alex Wice, said the Bitcoin halving is going to cause a repricing that is expected to send the price ballistic, arguing that even though people know about it, “it is never fully priced in.”
“Not enough leverage longs can match the tsunami of FOMO buyers if this fully sends.”
Bitget Wallet CEO expects some “short-term volatility post-halving” but that the bullishness arising from the event could lead to “strong levels of interest and growth in the wider Web3 ecosystem.”
At the time of publication, Bitcoin was trading at $71,563, up 3.8% over the last 24 hours
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
