Bitcoin’s biggest event is barely 48 hours and many are wondering what will happen post halving. However, the anticipation for this phenomenon is gradually fading as many argue that the event is losing its importance.
During previous halvings, the asset saw considerable price rallies as traders drum up support for the asset. However, this is not the case as of the time of writing.
The chart below shows price movements during the said occurrence. During the last three, it is certain that bitcoin saw massive price increases in the days leading to the event and after. For example, in 2020, it saw a 600% surge post halving and a significant surge before.
Why is the current halving different and how will BTC perform after this?
ApolloSats co-founder responded to the question of why the slow response to the upcoming event. They said that the “market is in equilibrium before the halving.” Thomas Fahrer believes that once it takes place, there will be “an immediate supply shock, but it’s small (450 coins per day).”
Fehrer stated that the supply shock will not amount to much until it piles up and causes a significant shortage which in turn price surges. Per their explanation, until this happens, BTC will not see a significant change in value.
Backing this claim, Marathon CEO explained that traders should not expect further price surges from the apex coin before the halving. In his words, he said, “bitcoin halving rally is already priced in.”
Following both explanations of what is currently happening with BTC, how will it perform post-halving?
Huge Uncertainty Post Halving
Recalling Fehrer’s statement of demand driving prices, there is no timeframe for this to happen. Bybit suggested that based on ETF demands, approximately 7,142 will leave exchange reserves daily. If this continues, exchanges will run out of the asset within the next nine months.
This means that the awaited surge will not happen immediately after the halving. This does not rule out chances of demand shocks until the ‘real’ uptrend begins. It also means whales can speed up the process and start the surge earlier. However, not immediately after the event.
Adding to the uncertainty in the next price action, 10x Research published a report that miners are holding over $5 billion worth of bitcoin. They plan to dump this huge volume after the said phenomenon. It remains to be seen if this will neutralize Bybit’s previous prediction.
While both speculations are different, it is glaring that the ‘real’ uptrend is not starting immediately after the upcoming event.
How Low Will Bitcoin Go?
With fundamentals indicating conflicting predictions, we turn to the chart. On the weekly scale, the coin is set to see more price declines in the coming days. The 12-week EMA is gradually declining. With the 26-week EMA edging closer to its counterpart, a bearish convergence is imminent.
The last time BTC had a notable bearish convergence it lost 65% lof its value before it recovered. While this might not happen this time, a notable decline is value is almost inevitable. It may lose as high as 30%.
Since January, the Relative Strength Index has trended above 70, indicating that the apex coin was overbought. Currently at 68, the bears are at an advantage as the metrics suggest further price declines and room for a drop to critical levels.
Using Fibonacci retracement reveals several key levels the BTC could test. A previous weekly outlook pointed to notable price struggles at $60k. It stated that the largest cryptocurrency will continue to see more retracements to this mark.
Based on the readings on the 1-week chart, bitcoin will flip $60k. Per the drawing on the chart, it will drop as low as $50k.
