The Bitcoin Halving will take place this week, fundamentally strengthening the digital asset market and Bitcoin in particular! The halving itself actually serves to make Bitcoin deflationary, but market participants tend to use it to capitalise on media attention and trading cycles. If a trade is to be executed due to the halving, it should be combined with a more long-term investment strategy.
Thought of the week
Digital Asset News
There could be a large outflow of bitcoin from miners in the months following the bitcoin halving like in previous cycles, according to a market analyst.
According to calculations by 10x Research head of research Markus Thielen in an analyst note on 13 April, Bitcoin miners could potentially liquidate $5bn worth of BTC after the halving.
“The overhang from these sales could last four to six months, which explains why Bitcoin could go sideways in the coming months – as has been the case after past halvings,” he added.
Thielen said the same could happen again, with crypto markets potentially facing “a significant challenge in a six-month ‘summer lull’.”
Thielen also believes that altcoins in particular could bear the brunt of this situation. Many of them have fallen sharply in the past week and many are still far from their 2021 highs. “Even if there is a correlation between the halving and an altcoin rally, as some are predicting, history shows that the rally typically starts almost six months later.”
Meanwhile, some crypto experts are hoping that the slowdown in capital outflows from GBTC means that the selling pressure from the Bitcoin investment fund will soon come to an end. After it was converted into a BTC ETF in January, many investors promptly withdrew their money from the financial product.
“Is the pressure to sell GBTC over?”, as Thomas Fahrer, head of the crypto portal Apollo, asks on X(formerly Twitter).
Fahrer points out that the outflows on 10 April correspond to just under 250 Bitcoin, which represents a whopping 95% decline compared to the start of the week.
As recently as 8 April, Grayscale recorded capital outflows of 4,288 Bitcoin or 303 million US dollars. This means that no definitive trend is yet discernible, but it is clear that Grayscale’s holdings are getting smaller and smaller and that the outflows will therefore automatically dry up in the future.
As the Bitcoin halving draws ever closer, whales have been acquiring significant amounts of BTC over the past week. About a week before the fourth “halving” – where the block reward is literally halved, or reduced to 3.125 BTC – rising demand from whales indicates optimistic market sentiment.
According to data from analytics firm CryptoQuant, the growth in demand for Bitcoin whales has never been stronger.
Demand from “permanent holders” has exceeded the market supply of new Bitcoin for the first time. This indicates that the amount of new Bitcoin being produced through mining is not enough to meet the demand of crypto investors, so the shortage is only expected to increase after the halving.
With each halving, the amount of BTC earned by miners halves, which increases the cost of mining new BTC. BTC prices must therefore rise to a certain level so that miners can continue to operate profitably.
Currently, the average cost of mining a Bitcoin is around USD 49,000, which is profitable at the current rate of around USD 70,000. However, BTC prices must rise above USD 80,000 after halving so that miners can continue to make a profit.
The phase of accumulation by whales is a positive sign for the digital asset market.
Digital Asset Market
Market report including trading idea
The majority of digital assets experienced setbacks last week. On the one hand due to lower trading volumes in the run-up to the halving and thus profit-taking and increased selling pressure, and on the other hand due to the Iranian attack on Israel, which temporarily spooked the markets. The situation eased towards Monday and the markets reacted positively to this news.
The famous Bitcoin Halving is now around four days away, which could bring a lot of attention to the market for digital assets and subsequently start a new cycle (focus on altcoins).
On a weekly basis, the overall market performance is therefore around -8.5%.
The message for the coming week is: Focus all attention on the effects of the halving, as this will be followed by a rotation towards altcoins.
Chart technology
From a technical chart perspective, Bitcoin is now in a larger trend channel between $60,000 and $70,000, which means that increased volatility is likely to be introduced and further volatility should be expected before the halving.
The halving could be similar to the Bitcoin Spot ETF announcement – temporary selling before the market rises in the long term.
As the media attention and catalysts of Bitcoin are “used up” after the Bitcoin Halving, altcoins should become the focus of media coverage and market participants, which could lead to a minor consolidation of Bitcoin.
The next price targets in the event of a positive development: ~$69,000, ~$71,500, ~$74,000
The next price targets in the event of a negative development: ~$63,500, ~$62,000 ~$60,000
Trading idea
Altcoin investments should be prepared this week, as good entry points can be found through the sell-offs. Risk hedging should be done at all times, but not too “close” to the current market prices, as increased volatility could occur throughout the week.
Weekly overview
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