KEY TAKEAWAYS
Bitcoin’s price has slumped some 15% since halving on April 19, 2024.
Maturity in the crypto industry and increased institutional adoption are driving new market dynamics.
Whales have purchased around 47,000 BTC in the past 48 hours.
The crypto markets are in a bit of a confusing state as Bitcoin’s (BTC) lackluster performance perplexes investors and analysts following its fourth halving event.
Bitcoin’s halving cycles aren’t as predictable as they used to be. Have we entered into a new market reality, or is this just a particularly odd year for crypto overall?
Pre-Halving Pump, Post-Halving Slump
The decline in Bitcoin’s (BTC) price following its fourth halving on April 19, 2024, was somewhat of a surprise to traders and analysts.
In the lead-up to the halving, the price of BTC was curiously beginning to recede from its newly-gained all-time high of just over $73,000.
This new lofty high was partly fueled by pre-halving expectations, which were coupled with the approval of spot BTC exchange-traded funds (ETFs) in the U.S. on January 10, 2024.
Following the tepid but successful rollout of Hong Kong’s very own BTC and Ethereum (ETH) spot ETFs on April 30, 2024, the price sunk even further, declining some 20 from its ATH to lows of around $56,000.
At the time of writing, BTC has begun to surge upward once again to a price of over $61,000.
Halving Cycles
Every four years, the rewards for Bitcoin miners are slashed in half, reducing the supply of new BTC tokens all the while increasing how difficult it is to get them.
To some, this is a period of sure-fire gains for their crypto portfolios. Historically, the market has rallied almost vertically upward following each and every halving.
But that simply hasn’t been the case this time around. Or is it just too early to tell? Crypto community members frequently remind others that the post-halving rally doesn’t always kick in immediately, especially under these circumstances.
Instead, the market is advised to be a little more patient than usual.
Whales in Action
According to analysts, retail investors have been liquidating positions in equity and crypto markets, which may be another factor why BTC’s price was headed downward. This is often the opportune moment for whales to buy in.
Extremely wealthy players in the crypto markets, or whales, are another missing piece to the BTC-price puzzle. This category of investor can have a major impact on the direction of BTC’s price, and it appears as though they are finally beginning to make their move.
Like every other trader, whales love to purchase BTC at a discount. The only difference is that they buy by the truckload.
This can swing the price of BTC upward at a moment’s notice and is typically followed by retail investors looking to rally behind them, capitalize on the momentum, and drive the price upwards some more.
Just HODL On
This appears to be a rather pivotal moment for Bitcoin and crypto overall, as the routines we have all become used to no longer appear to be in effect.
It could be that this halving cycle plays out just as the rest did, with the BTC price adding one or two extra zeroes to its figure.
But, with BTC’s ever-increasing legitimacy amongst institutional investors, pension funds, and national governments, it seems that sentiment toward BTC as an asset is now markedly more positive than ever before.
Bitcoin is further boosted by the interplay of the BTC mining industry maturing and greater utility on the Bitcoin blockchain through Ordinals and Runes. Furthermore, every single advance in blockchain technology (e.g. Ethereum Dencun upgrade), contributes to its overall success.
With these fundamentals considered, we might be in a completely different crypto era, which could continue to be increasingly unpredictable for years to come.
