Bitcoin Halving: Analysts Divided on Price Impact

As Bitcoin approaches its next halving, the notorious volatility of its price intensifies, presenting a mixed bag of predictions from various experts about post-halving price movements. Analysts are split, with some seeing bullish signals while others advise caution, reflecting the complex dynamics at play in the cryptocurrency market.

On-chain analysts like Julio Moreno, Head of Research at CryptoQuant, are optimistic, noting a decrease in sell pressure as traders have maximized their profits. CryptoQuant’s analysis shows that the “short-term holder realized price” has aligned closely with the market price, indicating that short-term traders no longer have large unrealized profits urging them to sell.

Conversely, technical analysts are more reserved, pointing to the market’s inherent unpredictability. Recent pullbacks in Bitcoin’s price, attributed to reduced Bitcoin ETF inflows and geopolitical tensions, have not deterred firms like IntoTheBlock from maintaining a ‘business as usual’ stance. Vincent Maliepaard, marketing director at IntoTheBlock, remarked on the rarity and unsustainability of the scenario where over 97% of holders were in profit during the price highs.

Glassnode, another analytics firm, notes that momentum metrics are still trending upwards across all timeframes, suggesting continued bull market momentum. However, their lead analyst, James Check, emphasizes the importance of a cooldown in the shorter 30-day indicator for a healthy market reset.

The banking sector remains sceptical about the post-halving price. Analysts from JPMorgan and Goldman Sachs have expressed concerns about potential declines. JPMorgan analysts, led by Nikolaos Panigirtzoglou, argue that the halving’s effects may already be priced into the market, with a volatility-adjusted price target significantly lower than current levels. They also cite a slowdown in venture funding and high open interest in Bitcoin futures as factors that could dampen price prospects.

Goldman Sachs acknowledges the historical price surges post-halving but cautions against assuming similar outcomes this time due to varying macroeconomic conditions. They suggest that the upcoming halving could act as a “sell-the-news” event, tempering expectations for immediate price jumps.

The Bitcoin community stands at a crossroads as the halving nears, with predictions ranging from bullish to bearish. This divergence highlights the cryptocurrency’s unpredictable nature and the varying analytical approaches used to forecast its future. As the halving event draws closer, the only certainty is Bitcoin’s continued ability to capture the attention and speculation of the global financial community.