A significant shift is occurring in the Bitcoin mining landscape as the fourth halving event approaches, which is set to reduce the supply subsidy of BTC from 6.25 BTC for every block to 3.125 BTC per one.
With approximately just 82 days left, Bitcoin miners appear to be selling their reserves, according to the latest analysis by CryptoQuant.
Miners Brace for Reduced Rewards in Halving
A notable reduction was observed in the Bitcoin reserves held by miners, coupled with a surge in BTC transfers to exchanges. Currently, the movement of Bitcoin from miners to exchanges is three times greater than the opposite flow. This pattern indicates a notable selling pressure originating from the mining community.
The fact that the miners selling their reserves is being deemed as a strategic move by CryptoQuant’s analysis.
Traditionally, miners tend to secure profits in anticipation of a halving event to cover operational expenses and prepare for future investments. This becomes especially significant as the competition in Bitcoin mining grows more intense with each halving. The reduction in the block reward following a halving event leads to a decrease in miners’ income unless there is a proportional increase in the price of Bitcoin.
To remain competitive in this changing landscape, miners find themselves compelled to invest in new and more efficient mining equipment and technologies. The capital required for these investments often comes from selling a portion of their Bitcoin reserves.
This pattern is crucial for both investors and market analysts to keep an eye on. The heightened selling pressure from miners has the potential to impact the short-term price of BTC. However, CryptoQuant also underscored the dynamic nature of the Bitcoin ecosystem, where strategic decisions made by miners can wield influence over market dynamics.
Price Revolution Post-Halving
The upcoming fourth halving, scheduled for April in the current cycle, is anticipated to follow a pattern observed in previous cycles. In last April, Bitcoin climbed all the way to $31,000. This historical trend suggests a high probability of a substantial surge post the fourth halving, potentially extending until April-August 2025 and surpassing the previous peak of $69,000.
Notably, a key takeaway from Bitcoin’s price behavior indicates a consistent pattern around each halving. The leading crypto tends to exhibit a gradual ascent about a year before the halving, sustaining this upward trajectory for 12-16 months post-halving, ultimately reaching new highs before entering a bearish phase.
For long-term investors, recognizing these patterns becomes crucial. The projected peak for this cycle is anticipated to fall between April and August 2025. It is important to adopt a strategic approach to exit the market during this period gradually, the on-chain analytic platform added.