Will the Halving Trigger a “Sell the News” Event? 

Crypto enthusiasts are keenly anticipating the Bitcoin halving event in 2024, which is predicted to have a significant impact on the cryptocurrency market. Steno Research analysts are forecasting this event to follow the “buy the rumor, sell the news” pattern observed in past halvings. The upcoming halving, which will further decrease miner rewards, is expected to incite a repeat of the 2016 scenario, where Bitcoin experienced a sell-off lasting several months post-halving.

The Bitcoin halving has historically marked a reduction in mining rewards, with previous events in 2012, 2016, and 2020 slashing rewards to 25 BTC, 12.5 BTC, and 6.25 BTC, respectively. Steno Research anticipates an initial surge in Bitcoin’s value as the halving approaches, but predicts a potential dip below its halving price within the first 90 days afterward, drawing comparisons with the post-2016 halving performance where Bitcoin’s value remained under its pre-halving price for 90 days.

With mining rewards at a record high due to Bitcoin’s price nearing its all-time peak, the upcoming halving will significantly increase the dollar value of the reduced BTC issuance. This might compel miners to sell their Bitcoin to cover operational costs, adding to the sell-side pressure and potentially leading to a price correction in the months following the halving.

However, the report suggests that once the market adjusts and “weak hands,” including speculative ETF investors, exit, the halving could act as a bullish catalyst for Bitcoin’s price. The anticipation of this event, despite being well-known, may not be fully accounted for in the price, indicating potential for a significant upward repricing according to analysts like Alex Wice.

Alvin Kan of Bitget Wallet also predicts some short-term volatility following the halving but remains optimistic about the bullish momentum it could bring, potentially sparking increased interest and growth within the broader Web3 ecosystem.