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Forecasts for the price of Bitcoin: +160% after the halving

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There is a lot of anticipation for the Bitcoin halving that is supposed to happen on April 20: for this reason, predictions about the price movements that BTC could undergo as a result of this very important event are pouring in. 

However, in all three previous occasions (2012, 2016, and 2020) the effect of the halving on the price of Bitcoin occurred only several months after the event, and this time it may not be different. 

Short-term price predictions for Bitcoin before the halving

An hypothesis that is circulating a lot these days is that before the halving, the price of Bitcoin could try to reach new highs.

In fact, it is possible that the bull run of the last few months has been influenced by the anticipation of the halving, and its consequences on the price of Bitcoin, but many may not have understood that this effect could also come several months later.

So it is possible that for months there has been a sort of latent and creeping FOMO among those who want to buy BTC before the halving believing that after its arrival the price may rise.

However, although several analysts argue that before the halving the price could still rise thanks to the anticipation of the event and this kind of creeping FOMO, there is a risk that the event itself may be disappointing for those expecting a price increase after its advent. 

On this note, the hypothesis circulating is that in the last decade of April, the price of Bitcoin could even drop, also because May is often not a particularly positive month for global financial markets.

So in the medium term the most circulating hypothesis is that the bull run that started more than five months ago could continue until the halving, and then abruptly stop. 

Post-halving: Long-term price predictions for Bitcoin (BTC)

However, things change if we look at the medium to long term. 

Indeed, it is possible that, just like in the three past occasions, a few months after the halving the positive signs of its consequences on the price of Bitcoin may begin to manifest. 

For example, according to the latest Bitfinex Alpha report published yesterday, the effects of the halving on the price of BTC could push the token price up by 160% in the next 12-14 months, potentially reaching and even surpassing $150,000.

This forecast was made based on the analysis of previous events and using statistical models. 

However, Bitfinex analysts also point out that there are some fundamental differences between the current cycle and previous ones, particularly because never before had the price of Bitcoin reached new all-time highs in the months just before the halving. 

Furthermore, there are also other factors clearly different from the past, such as the dynamics of demand for new ETFs, and the behavior of those who have recently purchased BTC at very high prices. 

On the short term, Bitfinex analysts for example hypothesize that prices will remain volatile but confined between $65,000 and $71,000.

The comment

The analysts at Bitfinex have added this comment to their reasoning: 

“The current cycle stands out from all previous cycles because the price of Bitcoin has already reached a new all-time high (ATH), even before the halving. This anomaly could be interpreted as a bullish indicator, but it also introduces a level of uncertainty in the market dynamics.”

Furthermore, about 1.875 million BTC, representing 9.5% of the circulating supply, have been purchased above $60,000, with a significant portion attributed to short-term holders, including new spot buyers and about 508,000 BTC in US spot ETFs. This highlights the active commitment of short-term holders at higher prices, reflecting the evolution of ownership dynamics in the context of market activity and institutional influence through spot ETFs. The increase in entity movements suggests a shift in the cycle towards gradual distribution of dormant supply and profit-taking.”

The comparison with 2021

Even in 2021, the year of the last major bull run, the price of Bitcoin had risen significantly from November to April. 

On April 17th, it set a new all-time high, reaching about $64,000, before starting a descent that continued throughout May, bringing the price back to around $30,000. 

It was a real collapse, which was magnified by the new Chinese ban on mining. 

However, if in the short term Chinese miners turned off their machines and panic ensued, in the medium to long term the problem was completely absorbed. In fact, in November of the same year, BTC reached a new ATH of around $69,000.

It is always necessary to distinguish between the behavior of those who buy Bitcoin as an investment, and those who instead buy it only for speculative purposes. In other words, it is necessary to distinguish between those who buy it only hoping to resell it shortly at a higher price, and those who buy it to include it in their portfolio with long-term objectives. 

The so-called holders, or those who buy to hold, have a greater ability not to be driven by emotions, while speculators often simply can’t wait to resell what they have purchased. 

 The dynamics in the coming months may not be linear, also because there are those who are waiting to sell. 

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