With only a few hours left until the Bitcoin halving, the cryptocurrency market has seen a notable decline, bringing concerns about a potential bear market. While Bitcoin has seen a staggering 19% drop, altcoins have seen even more dramatic declines, with some dropping as much as an incredible 70%. Given this trend, investors continue to discuss the immediate future of cryptocurrencies with so little time left until the halving.
The latest situation before Bitcoin halving
In retrospect, the Bitcoin halving was the trigger for the bullish outlook. It is well known that this event will significantly reduce the supply of BTC, and in theory, if the demand remains the same, the price will rise.
Such important events in the market are not determined solely by fundamental factors.
The latest price outlook for Bitcoin and altcoins can be called a reflection of the decline due to rumors rather than a downside outlook for fundamentals.
The sharp declines in altcoins (even more so than Bitcoin) highlight the high volatility and speculative trading that can precede such events. This is a reminder of the market’s sensitivity to changes in supply dynamics; the reduction in block rewards after the halving may lead to expectations of reduced supply pressure.
When does the Bitcoin halving take effect?
On the other hand, it should not be forgotten that the real impact of the halving may become more apparent in the coming weeks. As the market adjusts to the new supply structure, its impact on Bitcoin scarcity and Bitcoin’s new value can be seen in more detail.
The latest price drop is an aspect of the outlook for past halving cycles. In fact, it would not be wrong to say that these adjustments seem to support expectations.
Historically, we have seen people get excited about the halving period, which often leads to a reassessment of positions after the fact. It is critical to monitor social sentiment and whale behavior for more direct signs of market direction.
Additionally, the Market Value to Realized Value (MVRV) ratio is known for providing clearer insights into market sentiment. It reveals whether a crypto asset is overvalued or undervalued over a period of time.
The average age of cryptocurrencies should be watched. A potentially large drop could indicate broader market activity, while an increase in such activity could be an indicator of potential selling pressure.
These indicators, when combined with technical analysis and used in conjunction with traditional support levels, have the potential to provide direction for investors when they are lost.
On the other hand, an increase in the stablecoin supply transferred to stock exchanges could indicate bullish expectations and could be interpreted as investors taking buying action. Additionally, an increase in trading volume could also indicate growing support for the uptrend.
This could indicate a more stable accumulation phase for a potential bull run. Looking at resistance levels and on-chain signals is crucial to spotting a potential reversal.
Summarize
For the current market, the trend has not yet finished and the positive factors have not been fully released. The short-term decline is only to clear the contract longs. This is the case for every bull market. Therefore, what you should do now is to hold the value coins in your hands and wait for the bull market to break out!
