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After the Fourth Halving: Why Bitcoin price is not skyrocketing (yet)

By Solomon Victor

Following the fourth Bitcoin halving, investors and holders are focusing on tracking bitcoin’s (BTC) post-halving behavior. Many wonder why BTC is not skyrocketing after the halving. Understandably, investors are looking to gain better insights on potential BTC price movements as well as implications for the crypto market as a whole. Why is BTC price not skyrocketing (yet)?

Analyzing BTC’s Path Forward

Since Bitcoin halving occurs approximately every four years, this fuels forecasts about the cryptocurrency’s future. The halving, by which the number of BTC miners receive to validate transactions is divided in half, is traditionally linked with the strong market changes.

BTC has just passed through halving the fourth time. Several approaches can be used to draw some conclusions before the next halving. Interestingly, there has been an upsurge in the BTC withdrawals from centralized exchanges, implying that most investors are hoarding the asset in anticipation of price increase. 

Along with the above, analyzing BTC supply movements reveals a decrease in activity among long-term holders and a rise in transactions among new investors. With long-term holders increasingly being replaced by new investors—who may or may not end up being long-term holders of BTC, this may result in shifts in the market,  thereby impacting market sentiment and price stability.

Factors surrounding the fourth Bitcoin halving not a repeat of history 

Historically, BTC has been observed to experience a surge after the previous halving events. Nevertheless, the current post-halving landscape has factors that were not present in previous halvings, including the introduction of Bitcoin ETFs.  

Unlike previous cycles, BTC has already witnessed substantial price surges and regulatory developments prior to the halving, potentially altering the typical post-halving market dynamics. 

Additionally, the problems of rising inflation and economic insecurity might hinder the sentiment and expectations of investors, affecting the demand for BTC as a type of protection against traditional assets. Furthermore, the ongoing geopolitical tensions and regulatory developments may inject volatility and uncertainty into the market. 

Consequently, BTC investors should consider BTC price movements  over a short-term and medium period. In other words, BTC price is not expected to witness a sharp increase or decrease. .

Read also:

Is the next bitcoin halving in 2024 going to be the magic wand for a bullish run?

Bullish Price Sprint or Bullish Price Marathon vs Bearish Prive Movement

The range of the industry experts opinions’ on Bitcoin’s post-halving prospects are in different dimensions. Generally, there are three different schools of thoughts on the price movement of BTC post-halving.

The first group sees the BTC price hitting a sprint in a bullish run. This is informed by the number of institutions jumping on the BTC ‘bandwagon’ and a prevailing long-term investment strategy.

The second group sees BTC price hitting another all-time high post-halving but they do not think that the price run will be a sprint. They expect that this will be a marathon, where returns on investments in BTC largely depend on the investor’s or holder’s staying power amidst bearish seasons.. 

Lastly, the third group, who go against the bullish current, believe that BTC will witness correctional bearish price movements, and not really expected to hit a new all-time high.. They emphasize the uncertainty that is still highly present in this market.

Whatever it really is, it is vital for BTC investors and holders to identify risks and take a strategic approach to their portfolio in order to safely navigate the high-risk crypto world.

Altcoins as alternative investment opportunities

While BTC experiences price volatility and consolidation, altcoins offer an alternative for traders who are looking at more substantive gains. 

According to Santiment, a data analysis firm, many altcoins seem to be capitalizing on a “historic position” which could lead to a rally as the market value to realized value (MVRV) ratio, a metric for valuing the future profitability, is favorable. 

Read also: Between investing in bitcoin and Ether

Nevertheless, traders must exercise caution and must wisely conduct their research before investing in volatile markets of altcoins.

In an interview with Channels Television, Chuta Chimezie, founder of Blockchain Nigeria User Group (BNUG), brings a unique viewpoint on the Bitcoin post-halving journey.  He acknowledges the increasing institutional investment in BTC through Bitcoin ETFs. Chuta suggests that there may be a chance for unmatched price milestones. 

The evolution of the crypto market has seen an unusual pattern where BTC prices tend to drop before the halving period. 

Chimezie has, on the other hand, highlighted the peculiar attributes of this cycle as characterized by the institutional involvement and the adoption of long-term investment strategies. He foresees a bullish trend in the coming weeks or months with a possible BTC high of $250,000–$500,000 in a single cycle. Despite that, Chimezie tells us about the significance of caution and efficient strategy of the investment, urging investors to play safe by adopting appropriate portfolio management strategies.

BTC Price Outlook

At the time of writing, BTC price is facing decline, with the cryptocurrency trading at $57,300, representing a 13% decrease over the past seven days, per data on CoinGecko. Breaking below the $63,000 level, further downside potential could see BTC retracing towards support levels around $52,000 to $50,000. 

However, technical indicators such as the Relative Strength Index (RSI) on the daily timeframe suggest that BTC is approaching oversold condition, potentially signaling a rebound and the possibility of a new all-time high. 

Despite short-term fluctuations, the broader market sentiment remains optimistic, driven by institutional investment, which may influence BTC price trajectory in the coming days and weeks.

Read more:

How far could bitcoin go after the coming halving?

Credit: Solomon Victor is a Technical Analyst who is also knowledgeable about various aspects of blockchain and cryptocurrency.