As block rewards will reduce by 50% after Bitcoin halving in April 2024, BTC miners are selling heavily to finance the purchase of more efficient mining rigs.
After Bitcoin ETF approval last month, the entire crypto community is now looking forward to the Bitcoin halving event 2024, just 73 days from now. With BTC price flirting around $43,000 for a while, market analysts expect a bullish scenario to play out very soon.
Analysts believe that the retail and institutional buying interest will trigger soon ahead of the scheduled halving on April 18. Popular crypto investor Rekt Capital stated that the ‘pre-halving’ rally is just one week away from now. The trader believes that if history were to repeat itself, the BTC price could be on a straight 63-day uptrend leading up to Bitcoin halving.
The pre-halving rally marks the second phase in a series of five phases associated with Bitcoin halving. Preceding this phase is a downside phase, which commences 70 days before the event and lasts for seven days, a phase the market is currently experiencing. With Bitcoin already undergoing an 18% price pullback in January, Rekt Capital remains uncertain about the possibility of a correction occurring this week.
Following the correction in the initial phase, investors transition into the “Buying the Hype” phase, according to Rekt Capital. During this period, BTC price exhibits growth, driven by a subsequent “Sell the News” movement in the third phase, characterized by a “Pre-halving retrace”.
The retrace phase may extend over several weeks, notes the trader, concluding with a 20% retrace in Bitcoin’s price during the last halving. Nevertheless, the downward trend in prices ignites another wave of buying momentum, potentially lasting for 150 days. Rekt Capital added:
“Many investors get shaken out in this stage due to boredom, impatience, and disappointment with the lack of major results in their BTC investment in the immediate aftermath of the halving.”
BTC Price Under Pressure by Miners amid Expectations for Bitcoin Halving
Bitcoin miners are proactively preparing for an expected decrease in revenue resulting from the impending halving in April. After halving, the miner rewards will drop from the existing 6.25 BTC to 3.125 BTC.
According to data compiled by CryptoQuant, the Bitcoin miner reserves have declined by 8,400 tokens since the beginning of 2024, reaching a level of 1.8 million. This figure mirrors levels last observed in June 2021. Analysts interpret this decrease as a signal that miners are actively selling their tokens.
The miner sales seem to be putting additional selling pressure on the Bitcoin price, which has been struggling ever since the Bitcoin ETF launch last month. Following the approval of ETFs, CryptoQuant reports a net transfer of 3,617 Bitcoin from miner wallets to exchanges. Notably, on February 1st, there was a significant net outflow of 13,542 tokens, marking the largest single-day outflow since December 2020.
“Miners seem to be selling their holdings of Bitcoin to finance the purchase of more efficient mining rigs. The reduction in revenue could especially impact smaller mining operations, potentially pushing them out of business,” noted crypto exchange Bitfinex.