As the Bitcoin community approaches the anticipated halving event scheduled for around April 20, concerns are mounting about the possible repercussions for the market. According to Markus Thielen, head of research at 10x Research, Bitcoin miners may liquidate up to $5 billion worth of BTC in the months following the halving. This sell-off could mirror previous cycles where significant outflows from miners followed such events.
Thielen noted in an analyst note dated April 13 that this selling pressure might lead to Bitcoin's price moving sideways for four to six months after the halving, as it has in past cycles. For instance, after the 2020 halving, Bitcoin prices remained in a tight range between $9,000 and $11,500 for five months. If history repeats itself, significant price movements may not materialize until around October this year.
In the lead-up to the halving, miners tend to accumulate Bitcoin, leading to a temporary supply/demand imbalance, which has historically resulted in a price rally. This pattern was evident in early 2024 when Bitcoin prices surged 74% to hit an all-time high of $73,734 on March 14. However, the price has since corrected to below $63,000 in mid-April.
Thielen also highlighted the potential impact on altcoins, which have recently experienced significant declines. He suggested that, although there may be a correlation between halving events and subsequent altcoin rallies, historical data indicates that such rallies typically begin about six months after the halving.
A specific focus was given to Marathon, the world’s largest Bitcoin miner, which Thielen believes has built up a sizable inventory that will likely be sold off gradually post-halving to prevent a sharp decline in revenue. Currently producing 28-30 BTC per day, Marathon's output is expected to reduce to 14-15 BTC per day post-halving. This strategy of gradual selling could be adopted by other miners, potentially leading to a maximum of $104 million worth of BTC being sold each day.
This strategy aims to reverse the pre-halving supply/demand imbalance that contributed to the recent price rally. Last week, Marathon's CEO, Peter Thiel (not to be confused with the well-known entrepreneur), remarked that the firm's break-even rate post-halving would be about $46,000 per BTC to remain profitable, suggesting that significant price movements are unlikely in the six months following the halving.
As the cryptocurrency community watches closely, the strategies adopted by miners post-halving will play a crucial role in shaping Bitcoin's market dynamics in the latter half of the year.
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