Bitcoin Halving 2024: Bearish Forecasts Emerge from Top Industry Analysts

April 20, 2024

Amid much anticipation, the Bitcoin network reached a significant milestone Friday evening as it completed its eagerly awaited fourth “halving” event.

Despite investors’ widespread anticipation based on the cryptocurrency’s historical performance to deliver significant gains in the months ahead, numerous industry leaders and market analysts expressed a bearish outlook, suggesting that the price might experience a downturn following the reward halving.

The Quadrennial Event And Expectations

The halving was written into Bitcoin’s code at its inception by pseudonymous creator Satoshi Nakamoto as a way to reduce the rate at which bitcoins are created. Mechanically, while the halving’s immediate impact on Bitcoin’s price may be minimal, historical trends have led many to believe that it will underscore Bitcoin’s value as an increasingly scarce commodity.

It’s worth noting that following the 2012, 2016, and 2020 halvings, the price of Bitcoin surged approximately 93x, 30x, and 8x, respectively, from its halving day price to its cycle peak. While Bitcoin’s finite supply was capped at 21 million tokens, and further reduced during the BTC Halving event, skeptics view it as a mere technical adjustment exploited by speculators to inflate the cryptocurrency’s value.

But what lies in store for Bitcoin’s price following this year’s Halving event? Will it continue along its established trajectory, or are we on the brink of a new trajectory in the cryptocurrency landscape? Moreover, what do the technical indicators suggest, and what insights do industry analysts and leaders offer?

Technical Indicators

There are several projections that Bitcoin faces the risk of a correction to $60,000 or even lower. This prediction is backed by the movements on the Relative Strength Index (RSI), which tracks the momentum of Bitcoin’s price. The RSI shows lower lows and lower highs, indicating a decrease in momentum.

Furthermore, the Awesome Oscillator (AO) is signaling a move toward negative territory, with the intensity of the red shade increasing. Similarly, the Moving Average Convergence Divergence (MACD) has dipped below the orange band of its signal line, hinting at a potential shift toward a bearish trend.

These technical indicators suggest that Bitcoin’s price could drop below $60,000 in the near future, possibly testing support levels at $59,530 or even lower to the $50,420 threshold. 

But, it is not bad news at all. For instance, a surge in buying pressure could potentially reverse this downward trend and propel Bitcoin’s price to a much higher territory. A clear candlestick close above the psychological level of $70,000 in the 3-day time frame would confirm the continuation of the upward trend. This has the potential to lead the king of crypto to reclaim its previous peak of $73,777 or possibly reach a new all-time high.

Bearish Experts’ Forecasts

For digital asset research firm 10X Research, traditional price influencers like Bitcoin ETFs and halving events are losing their impact, prompting a prediction of a potential Bitcoin price drop to $52,000 to $55,000. The culprit behind this downturn is the negative turn of the funding rate, a key metric in perpetual futures contracts.

A negative funding rate indicates that long positions are subsidizing short positions, signaling a bearish sentiment in the market. While this shift may not be widely recognized, Bitcoin is already reacting to it, potentially offering investors a chance to buy at lower prices soon.

K33 Senior Analyst Vetle Lunde in his “Mid-April Outlook,” anticipated, in the short term, stagnation and mild fear and uncertainty immediately following the halving. However, he was optimistic that the reduced selling pressure from miners, who will sell fewer coins due to the halving, would have a positive impact in the long term. 

“While positive in the long term, the halving could cause mild short-term turbulence due to block production slowdowns,” he said, adding, “Historically, this compounding reduction of sell-side pressure has caused a steady drift higher, and I expect the present to mirror the past, meaning that I view the coming months as solid months for aggressive accumulation.”

JP Morgan analysts led by Nikolaos Panigirtzoglou do not anticipate an increase in the price of Bitcoin following the halving event, as they believe that the market has already adjusted to account for it. In fact, they expect downside potential for the Bitcoin price post-halving. In a note, the analysts said, “We do not expect Bitcoin price increases post-halving as it has been already priced in. In fact we see a downside for the Bitcoin price post halving for several reasons.”

Fred Thiel, the CEO of BTC miner Marathon Digital, suggested in an interview with Bloomberg that the current price of Bitcoin has already factored in, at least to some extent. “The halving will reduce the supply of Bitcoin by about 450 per day, which will have some small impact on price movements probably,”  Thiel said, anticipating that this reduction in supply will likely have a modest impact on price movements. In essence, he implied that while the halving event will have some influence on Bitcoin’s price, the market has already adjusted to this expectation to some degree.

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