With Bitcoin’s highly anticipated halving event just 9 days away, excitement is mounting among crypto enthusiasts worldwide. However, analysts at Steno Research caution that it could trigger a “sell-the-news” reaction, echoing patterns observed in previous halving events.
With past halvings serving as a backdrop, questions arise about whether history will repeat itself or if new dynamics will emerge.
Since its inception, Bitcoin has undergone three halving events, each time cutting miner rewards in half. The most recent halving in May 2020 saw rewards drop to 6.25 BTC per block, and analysts anticipate a similar pattern this time around.
Analysts at Steno Research have drawn parallels between the upcoming halving and the 2016 event, emphasizing a potential sell-the-news” scenario, reminiscent of previous occurrences.
Analysts anticipate a surge in Bitcoin’s value in the lead-up to the event. However, they warn that prices could dip below pre-halving levels within the first 90 days following the event, with a notable 8.4% decrease observed.
Despite heightened anticipation, historical patterns suggest that short-term speculators and Bitcoin ETF purchasers might capitalize on the event to book profits.
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Data from CryptoQuant reveals that Bitcoin’s daily mining rewards are currently at record highs, coinciding with the cryptocurrency’s near-all-time high price. Despite the reduction in newly issued BTC after the halving, the overall value of these rewards remains substantial.
However, Steno Research notes that miners may gradually sell their Bitcoin holdings to cover operational costs, contributing to downward pressure on prices post-halving.
Another analyst, Alex Wice, also weighed in on the Bitcoin halving, suggesting that it could cause a repricing that sends the price ballistic. Wice argues that despite awareness of the event, it is never fully priced in, potentially leading to a surge in demand from FOMO buyers.
Despite short-term volatility, analysts remain optimistic about Bitcoin’s long-term prospects. They anticipate that once the initial market adjustments settle, the halving could serve as a bullish catalyst for Bitcoin’s price, driving renewed interest in the wider cryptocurrency ecosystem.
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