Bitcoin Halving Price Prediction: Can BTC Keep Outperforming Traditional Assets Post Halving?

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Bitcoins expected price adjustment: The cryptocurrency market shows signs of volatility as the upcoming Bitcoin halving approaches. Based on estimates from various blockchain calculators, such as CoinGecko, this will be the third occurrence of halving and it is predicted to take place in approximately two days, specifically on April 20th.

What Is Bitcoin Halving?

Satoshi Nakamoto, the inventor of Bitcoin, designed the system to limit the total supply and make it valuable as a digital currency by programming the reward for miners to be reduced in half roughly every four years, or after the mining of 210,000 blocks.

At present, the blockchain is nearly at the anticipated event, with the latest block being number 839,638. During this phase, the network’s rewards for miners, who secure the network and process transactions by solving intricate mathematical problems, will decrease from the current 6.25 BTC to 3.125 BTC per block.

After a Bitcoin halving, which is an event that reduces the reward for mining new blocks, investors often anticipate an immediate price increase. However, historical market trends suggest that the true effect of this occurrence might not materialize until several months have passed.

Decreasing the reward for mining new Bitcoin will result in only half the previous amount, around 450 BTC, entering the existing Bitcoin supply each time.

Alternatively, the importance of Bitcoin’s halving could be emphasized by rising demand from both individual and large-scale investors. This demand could cause supply and demand imbalances, leading to a steep price increase.

In two days, Bitcoin will experience its fourth reward reduction for mining, called a halving. This biannual event cuts down the number of new Bitcoins created per block from 6.25 to 3.125. Historically, bulls have taken control after each halving. However, the significance and the length of time it takes to reach this point can vary significantly.

— Wu Blockchain (@WuBlockchain) April 17, 2024

In the past, Bitcoin’s price has reached new record highs a few months following each halving event. This trend is predicted to continue, given the introduction of a spot Bitcoin ETF which could significantly boost demand for Bitcoin compared to previous market cycles.

In March, the introduction of the ETF for Bitcoin in the US caused its price to reach a record high of $73,803. Despite recent daily net outflows being common, experts predict that investor demand will rebound following the halving event and the anticipated bull market.

Based on information from Wu Blockchain, a cryptocurrency journalist, and data from SoSoValue, Bitcoin ETFs collectively had a daily net withdrawal amounting to $58.03 million.

Based on SoSoValue’s report, the Bitcoin spot ETFs collectively saw an outflow of approximately $58 million in the previous day. Notably, GBTC, a specific Bitcoin spot ETF, experienced an exceptional daily outflow amounting to $79.38 million. Meanwhile, GBTC’s historical net outflow reaches an impressive total of $16.46 billion.
— Wu Blockchain (@WuBlockchain) April 17, 2024

On April 16, Grayscale’s GBTC had the largest outflow of funds with a total of $79.38 million. Ark Invest experienced a net outflow of $12.88 million, while BlackRock’s IBIT ETF recorded a net inflow of $25.78 million.

Bitcoin Halving Price Prediction: Can BTC Keep Outperforming Traditional Assets Post Halving?

Bitcoin Halving Price Prediction As $62,000 Support Holds

The price of Bitcoin has touched its support, which is located between $61,000 and $62,000, on at least four occasions since February. Should this level hold once more, it could lead to a buying frenzy among investors eager to jump in before the upcoming halving event.

From the standpoint of the Relative Strength Index (RSI), Bitcoin’s technical condition is predominantly bearish, suggesting another potential drop in price this week. The RSI, currently at 39 which is considered neutral, has been unable to surpass the resistance trendline, increasing Bitcoin’s susceptibility to selling pressure.

If the downward trend continues for Bitcoin, its price could potentially fall to hit the significant liquidity points around $60,000. In a more severe scenario, it may even dip towards the support levels at $58,000 or $56,000 before starting a new trend upward.

Bitcoin Halving Price Prediction: Can BTC Keep Outperforming Traditional Assets Post Halving?

The fact that Bitcoin’s price is lower than its moving averages, such as the 20-day simple moving average (SMA), the 50-day SMA, and the 200-day SMA, supports the pessimistic outlook.

If Bitcoin’s price rises above $63,830, its opening price from the previous day, the trend may change direction and head upward, fueled by the excitement surrounding the upcoming Bitcoin halving event, potentially reaching $70,000.

Although Glassnode made adjustments in late March and again this week, their analysis of bitcoin’s performance versus traditional assets indicates an outperforming trend from the beginning of April 2019 until now.

During the period from April 2019 to March 2024, incorporating a modest amount of cryptocurrencies into a conventional 60/40 investment portfolio significantly enhanced returns. Specifically, a 3% investment in crypto led to a total return of 52.9%, and a 5% allocation resulted in an impressive 67.0% return – significantly more than the traditional approach’s 33.3% returns.

— glassnode (@glassnode) April 16, 2024

Companies with as little as 3% of their financial resources invested in Bitcoin saw their returns increase by 52.9%, whereas those investing 5% experienced a return of 67%. This is a substantial improvement over traditional asset strategies, which only managed to grow returns by 33.3%.

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2024-04-17 17:48