Why is Bitcoin Down 13% Since Halving?

Bitcoin’s price has experienced a significant decline, dropping 13% since its fourth halving on April 20 at 12:09 am UTC, despite initial expectations of a post-halving surge.

On the date of the halving, Bitcoin was trading around $64,000. It briefly rallied, reaching over $67,000 on April 22, but has since been on a downward trend, falling below $57,000 by May 1, according to CoinGecko. At the time of writing, Bitcoin’s price has further slipped to about $56,500, marking a 10.4% decrease over the last 24 hours and a 22% drop from its April 8 high of over $72,000.

This decline post-halving has come as a surprise to many, given the historical precedent of price rallies following past halvings. For instance, after the 2016 halving, Bitcoin’s price soared approximately 3,000% over 17 months, eventually reaching $20,000 in December 2017.

However, the current cycle differs notably from previous ones, particularly because of the significant bull run leading up to this latest halving, where Bitcoin hit a new all-time high just before the event. Mati Greenspan, founder of Quantum Economics, commented on the unique circumstances of this halving, noting, “What’s unique about this latest Bitcoin halving is the incredible bull run and price action leading up to it. Even considering this recent pullback, Bitcoin has still been up 35% since the start of the year.”

Greenspan also pointed out that the recent decline in Bitcoin’s price could be anticipated given the downturn in the stock market and broader economic conditions. He mentioned, “Considering the expectation of yet another Fed pivot and what’s happening in the stock market, Bitcoin’s current price action is hardly a surprise.”

Prior to the halving, some analysts, including those from JPMorgan, predicted a drop in Bitcoin’s price, estimating it could fall to around $42,000 post-event. Markus Thielen, CEO and head analyst at 10x Research, suggested a potential drop to $52,000, attributing the recent rally to inflows into Bitcoin ETFs, which have slowed significantly over the past month.

Despite the current downturn, other analysts like investment researcher Lyn Alden believe there are ample reasons, beyond the halving and U.S. ETFs, for Bitcoin to achieve new highs in 2024.

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