Looking at the formation in the daily chart, Bitcoin bulls are struggling for momentum. Despite the expansion on August 8, reversing losses of August 5, buyers didn’t follow through, meaning traders are waiting for more confirmation before diving in.
The lack of activity in the past few trading days means prices are inside a bull flag and trending within the August 8 bull bar. Although buyers are upbeat, the dull range is expected, especially looking at historical performance after Halving.
CryQuant CEO: Bitcoin Will Likely Rally In Q4 2024
Taking to X, Ki Young Ju, the CEO and founder of CryptoQuant, notes that prices trend to consolidate whenever the network half events. This sideways movement tends to last for the better part of the year before prices soar in the last quarter as whales intervene.
In the last bull cycle, when Bitcoin halved network rewards in 2020, prices moved sideways, and prices only inch higher in the last quarter of the year. Comparing the current state of price action to what happened then, it is highly likely that Bitcoin will recover. Ju said this bullish outlook is because “whales won’t let Q4 be boring with a flat YoY performance.”
Analysts consider Bitcoin Halving a bullish event, at least looking at how prices have evolved. Whenever the network halves miner rewards, the coin becomes deflationary.
Half the number of tokens finds its way to the circulating supply. Prices will tick higher if the demand remains the same (or rises).
Impact of Spot ETFs, Miner Liquidation, And Interest Rates Cut
The expected supply crisis following the Halving on April 20 is why most analysts still believe the coin will break all-time highs. This confidence is due to the approval of spot Bitcoin ETFs in January. Since then, leading issuers, including Fidelity and BlackRock, have bought billions of dollars worth of BTC.
Besides the institutional demand for BTC, miners have decreased their liquidation. The hash rate fell after weak miners offloaded billions of coins in June. However, the hash rate has improved in the past few weeks, pointing to renewed confidence from miners who bought new gear to stay competitive despite the lower rewards.
In September, the United States Federal Reserve will likely slash interest rates. As inflation falls and the central bank eases, investors may consider BTC a hedge against inflation. This will favor bulls, who might build momentum and break all-time highs.
Feature image from Canva, chart from TradingView