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Bitcoin Traders Eye Halving as a Sell Event, A Warning for Investors

Last Updated April 9, 2024 10:47 AM
James Morales
Last Updated April 9, 2024 10:47 AM

Key Takeaways

  • The Bitcoin halving is on track to occur on April 19.
  • Several analysts have predicted that the event could be bearish in the short term.
  • The price of BTC could pull back to around $67,000 in early May.

With less than 2 weeks to go until the next Bitcoin halving, historical precedent suggests the cryptocurrency’s price could rise further in the next 12 days.

But what will happen after the event? With many traders expecting a price peak around the time of the halving, selling pressure could cause the market to slump.

What Happened After Previous Halvings?

Following the November 2012 halving, the price of Bitcoin remained flat for around a month after the event before rocketing to new heights in the spring. 

Four years later, BTC peaked nearly 3 weeks before the halving, but then pulled back sharply, taking over 3 months to regain momentum and start rising again.

Finally, Bitcoin traded sideways for around 2 months after the 2020 event, consolidating gains it had made in the previous 2 months.

Arthur Hayes Predicts Post-Halving Price Drop

In a recent blog post , BitMEX co-founder Arthur Hayes acknowledged that the upcoming halving is bullish for crypto markets in the medium term. “However, the price action directly before and after could be negative,” he cautioned.

“The narrative of the halving being positive for crypto prices is well entrenched. When most market participants agree on a certain outcome, the opposite usually occurs. That is why I believe Bitcoin and crypto prices in general will slump around the halving.”

Hayes said he has already offloaded his more speculative crypto assets, placing the profits into Ethena’s high-yield USDe.

For traders who want to short crypto markets, he said the best time was between April 15 and May 1st, when tax payments will take liquidity from the system, creating precarious conditions for risky asset markets.

For his part, Hayes has no plans to short anything. Instead, he will simply hold off from trading until May and then buy back in ahead of an anticipated bull market in the summer.

Similarities With ETF Hype

Many analysts have compared the upcoming halving to those that went before. However, other events that affected the price of Bitcoin are also worth considering.

Crypto market analyst Benjamin Cowen recently observed that the BTC market ahead of the halving bears a resemblance with the period preceding the SEC’s approval of Bitcoin ETFs.

If the price of BTC follows a similar pattern, it could peak at over $75,000 on the day of the halving, but then fall back as low as $67,500 in the first week of May.


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