This Is Why Bitcoin Might See a Correction Before the Halving

Analysis1mos agoUpdate 6086cf...
28 0

In Brief

  • Bitcoin’s year-to-date price surge of 72% signals a price discovery mode, but indicators hint at a potential correction.
  • Short-term holders sit on 70% profits, and whales offloaded over 80,000 BTC, suggesting a sell-off may be imminent.
  • Despite bearish indicators, Bitcoin ETFs’ accumulation can drive a bullish breakout if BTC sustains closes above $74,000.

Bitcoin has once again captured the spotlight, registering a staggering 72% price increase year-to-date. Opening the year at $42,560 and breaking all-time highs to now trade at $73,000, BTC finds itself in price discovery mode. With no historical price resistance or support, the market is tasked with establishing new benchmarks before the halving.

Despite this impressive rally, there are indicators suggesting that Bitcoin may be on the verge of a price correction.

Bitcoin Whales Are Booking Profits

A notable metric, the Short-Term Holder Realized Price and Profit/Loss Margin indicator, reveals that short-term holders are currently sitting on 70% profits in their Bitcoin holdings. This level of unrealized profit, unprecedented in the last three years, hints at a potential sell-off.

This indicator, which tracks the average price at which coins held by short-term holders, less than 155 days, were last moved, suggests a significant portion of these holdings are in profit.

This Is Why Bitcoin Might See a Correction Before the Halving
Short-Term Holder Profit Margin. Source: CryptoQuant

While short-term holders seem reluctant to realize profits, several whales have begun to reduce their Bitcoin holdings ahead of the halving.

On-chain data shows that Bitcoin whales, or large-scale investors holding between 1,000 and 10,000 BTC, have offloaded over 80,000 BTC in the past month, equating to approximately $4.96 billion. If it persists, this selling pressure could prompt a price correction by encouraging short-term holders to book profits, potentially accelerating a downward trend.

Read more: Where To Trade Bitcoin Futures: A Comprehensive Guide

This Is Why Bitcoin Might See a Correction Before the Halving
Bitcoin Whales Holdings. Source: Santiment

BTC Price Prediction: A Dip Ahead

Based on the MVRV Pricing Bands indicator, a price correction could push Bitcoin to test the 2.4 MVRV level, currently near $61,700.

The MVRV Pricing Bands are graphical representations that plot the MVRV ratio over time, delineating different market sentiment levels. They can gauge how the current price compares to historical realization prices and signal potential market reversals or continuations.

Read more: Bitcoin Price Prediction 2024/2025/2030

This Is Why Bitcoin Might See a Correction Before the Halving
MVRV Pricing Bands. Source: Glassnode

However, amid these bearish signals, a bullish factor emerges with the recent influx to Bitcoin ETFs. These financial instruments have been accumulating at an unprecedented rate, purchasing 433,843.58 BTC since their inception, which translates to about $31.67 billion at current prices.

This significant buying power, excluding Grayscale’s GBTC, could potentially counteract the bearish outlook.

Should these ETFs continue their aggressive accumulation and Bitcoin sustain a daily close above $74,000, it may invalidate the bearish perspective. Such a scenario could trigger a bullish price breakout before the halving, propelling Bitcoin to test the 3.2 MVRV level at $85,000.

Top crypto platforms | March 2024

This article is sourced from the internet: This Is Why Bitcoin Might See a Correction Before the Halving

Related: This Indicator Predicts When Bitcoin Will Reach $5 Million

In Brief The Bitcoin Stock-to-Flow (S2F) model, highlighting scarcity, predicts significant price increases for Bitcoin by the 2024 and 2028 halvings. Critics, including Ethereum co-founder Vitalik Buterin, argue the S2F model oversimplifies market dynamics, potentially misleading investors. Despite skepticism, the model forecasts Bitcoin reaching $5 million post-2028 halving, sparking debate within the cryptocurrency community. As the 2024 Bitcoin halving approaches, investors speculate about the potential impact on Bitcoin’s price due to increased scarcity. Among several methods to predict Bitcoin’s price, the Bitcoin Stock-to-Flow (S2F) model stands out. Popularized by X (formerly Twitter) user PlanB, the S2F model draws from traditional stock-to-flow ratios used in commodities markets, such as gold and silver, offering an intriguing forecast for Bitcoin’s future value A $5 Million Target After the 2028 Bitcoin Halving The stock-to-flow…

 

© Copyright Notice

Related articles

No comments

You must be logged in to leave a comment!
Login immediately
No comments...