- Kraken’s exec sees the halving as symbolic in terms of supply impact and usage
- Some market watchers expect some short-term drawdown
After great excitement, Bitcoin‘s (BTC) fourth halving has come to an end. Notably, the 2024 Bitcoin cycle has been exceptional, as BTC reached a new peak price of $73,700 just prior to the halving.
According to Thomas Perfumo, the Head of Strategy at Kraken, the upcoming bitcoin halving event has distinctive and symbolic characteristics beyond just being the fourth time this process occurs. In a recent interview, Perfumo shared his insights on this topic.
In my view, among all the significant moments in Bitcoin’s past and future, this one stands out as the most symbolic. This is because, during this time, individuals who were concerned about inflation, high interest rates, and their overall economic situation saw Bitcoin as an enticing alternative currency.
Adding to the unique impact of the fourth halving on Bitcoin’s supply schedule, he noted,
“Once the Bitcoin halving occurs, approximately 94% of the total Bitcoin that can ever be produced will have been mined. Subsequently, the inflation rate in the circulating Bitcoin supply is expected to be below 1%.”
BTC’s price prospects in the short-term
After a cryptocurrency’s supply is reduced through halving, many markets anticipate an increase in selling pressure. In a separate conversation with CNBC, Dan Dolev, Managing Director at Mizuho Securities, referred to this occurrence as a “sell-the-news” event. In simpler terms, investors may choose to sell their holdings following the halving, leading to increased selling pressure in the market.
Citing the immense publicity around the 2024 halving compared to past cycles, he said,
“Bitcoin has likely reached its current value based on existing market factors. The upcoming event may cause some investors to sell their holdings, leading to potential price decreases.”
Around the beginning of April, BitMEX’s founder made predictions with a similar tone, attributing potential liquidity issues near the Bitcoin halving to the US tax season.
The political instability in certain regions, such as the Middle East, could worsen the pessimistic outlook. In fact, recent incidents involving Israel and Iran may lead to heightened tensions.
If that’s the case, the short-term selling pressure might cause Bitcoin’s price to drop below key support levels following the halving event. Yet, due to Bitcoin’s inherent volatility, it could keep oscillating between its previous support and resistance levels despite the halving.
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2024-04-20 06:15