Anticipated to be a significant event in the crypto market, the upcoming Bitcoin halving in 2024 has caught the attention of many traders. However, analysts at Steno Research have a different perspective, predicting that it will follow the trend of a “buy the rumor, sell the news” event.
In the past, Bitcoin has experienced three halving events, which resulted in a reduction of miner rewards. These events took place in 2012, 2016, and most recently in May 2020, decreasing the rewards from 50 BTC to 25 BTC, then to 12.5 BTC, and finally to 6.25 BTC.
Steno Research suggests that the upcoming halving will resemble the pattern seen in 2016, where selling pressure continued for up to four months after the event. Despite the heightened anticipation from Bitcoin ETF holders, the research firm expects a short-term surge in BTC’s value leading up to the halving, followed by a dip below its price within the first 90 days.
Analyzing the performance of Bitcoin before and after the 2016 halving, Steno Research analysts have identified similarities that indicate similar outcomes can be expected from the upcoming event. The report highlights that Bitcoin’s price remained below its pre-halving level for the entire 90-day period following the halving, with a specific 8.4% decrease on the 90th day.
Data from CryptoQuant reveals that Bitcoin daily mining rewards are currently at their highest ever, coinciding with the cryptocurrency trading close to its all-time high. This implies that even though the number of BTC issued will be the smallest yet after the halving, the value of this issuance will be significant when measured in dollars.
As a result, miners are expected to gradually sell their Bitcoin to cover mining costs, contributing to the sell-side pressure that leads to price corrections after the halving.
Despite these observations, the halving event is considered a bullish catalyst for Bitcoin’s price once the selling pressure from miners subsides. Analysts believe that the halving will lead to a repricing that will significantly impact the price, even though traders are aware of the event.
While some expect short-term volatility following the halving, others predict strong interest and growth in the wider Web3 ecosystem.
At the time of publication, Bitcoin was trading at $71,563, representing a 3.8% increase over the past 24 hours.
It should be noted that this article does not provide investment advice or recommendations. Readers are encouraged to conduct their own research and analysis before making any investment decisions.