The Bitcoin halving, a pivotal event looms on the horizon that is poised to redefine market dynamics. Set around April 20, this event will cut the mining reward for a Bitcoin (BTC) block from 6.25 to 3.125 BTC.
Analysts like Arthur Hayes, Benjamin Cowen, and Peter Brandt forecast a potential downturn in Bitcoin’s price post-halving.
Will Bitcoin Crash After Halving: Analysts Weigh in
Arthur Hayes, a seasoned voice in the crypto sphere, presents a complex view of the Bitcoin halving. Despite the general optimism, he predicts a market downturn.
“The narrative of the halving being positive for crypto prices is well entrenched. When most market participants agree on a certain outcome, the opposite usually occurs. That is why I believe Bitcoin and crypto prices in general will slump around the halving,” Hayes explained.
Moreover, Hayes highlights the broader economic backdrop. He notes the tighter dollar liquidity and the onset of Quantitative Tightening (QT) by the Federal Reserve, which will reduce the money supply.
Consequently, he expects a “precarious period for risky assets” in late April. Yet, he predicts a market boost post-May 1, following a Federal Reserve meeting, due to an anticipated liquidity injection.
“From now until May 1, I will be in a no-trade zone. I hope to return in May with dry powder ready to deploy to position myself for the bull market to begin in earnest,” Hayes remarked.
“Usually these patterns do not repeat exactly, but just showing it here in case something similar happens once again,” Cowen said.
Veteran analyst Peter Brandt supports Cowen’s view, acknowledging recurrent patterns in Bitcoin’s bull markets.
This sentiment aligns with Monday’s ETF flow data, which showed a negative trend despite Bitcoin’s price reaching $72,000. For instance, the GBTC saw outflows of $303.3 million, contributing to a total negative ETF flow of $223.8 million. Whereas BlackRock’s IBIT reported just $21.3 million in inflows.
This data might hint at a broader market hesitancy or profit-taking behavior.
Additionally, the halving will likely exert pressure on Bitcoin miners. With the reward halving, miners’ earnings, or hashprice, will likely plummet. Hence, they might resort to selling some of their Bitcoin reserves to meet operational expenses.
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