New research conducted by market intelligence company Glassnode suggests that as the Bitcoin halving event approaches, financial institutions and “smart money” are influencing the price of the cryptocurrency.
Glassnode’s analysis reveals that during the previous halving events, Bitcoin experienced significant price surges: a 1,000% increase during the first halving, a 200% increase during the second, and a 600% increase during the third.
The upcoming halving is expected to occur around April 19th and will result in a 50% reduction in BTC miners’ rewards.
Glassnode emphasizes the potential impact of this event on the supply-demand dynamics and market pricing of Bitcoin. The historical patterns observed in previous halving events offer valuable insights for predicting potential market movements and preparing investment strategies accordingly.
According to Glassnode, the price of Bitcoin has historically been driven up by halving events due to the reduction in newly issued supply, which boosts demand. However, this time around, the firm believes that BTC’s price may experience volatility due to three key factors.
Firstly, institutional involvement through ETFs (exchange-traded funds) and the changing behavior of long-term investors and “smart money” entities complicate the dynamics of this halving event. These factors collectively suggest that the market response to the upcoming halving will be more nuanced.
Secondly, Glassnode emphasizes the importance of monitoring ETF inflows and outflows, as a decrease in ETF purchases could signal an impending market downturn.
Thirdly, increased selling by long-term holders could indicate a nearing market peak, which would impact overall market stability and price levels.
Traders are advised to be cautious of potential sell-the-news effects surrounding the halving event and to consider making strategic adjustments to their positions in order to navigate the expected volatility.
As of the time of writing, Bitcoin is trading at $60,578, which represents a 2.17% decrease in the past 24 hours.
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