Author: Max Kalmykov, CEO Bitsgap
The crypto markets are currently range-bound as the upcoming Bitcoin halving draws near.
The halving, scheduled to occur on April 20-21, will reduce the Bitcoin mining reward from 6.25 BTC to 3.125 BTC per block. Historically, these quadrennial events have kicked off major bull runs in the second half of the year. However, traders seem uncertain about the market impact this time around, as many factors remain up in the air. Still, Bitcoin has retained most of the gains from its record-breaking rally earlier this year, following the launch of the first Bitcoin spot ETFs.
While predicting the market’s moves is notoriously difficult, I’ll analyze the current state of the crypto market, explore expectations for post-halving price action, and discuss potential trading opportunities.
The current state of the market
Bitcoin is currently trading at $66,590.8, down 6.74% since the start of April. It has seen significant volatility after hitting its all-time high, with prices dropping to $61,494 on March 20 before recovering to notch the highest ever monthly close on March 31. The impending halving is undoubtedly ratcheting up market volatility, as traders, miners, and institutional investors remain on tenterhooks awaiting the supply-crunching event ahead.
Miners, in particular, are bracing for impact, as less efficient operators and those with capital constraints face being shaken out. However, some firms see opportunities to acquire assets and upgrade to more efficient machines to position themselves for future growth. With block rewards set to halve, strategic planning and economies of scale become more critical than ever — likely catalyzing a new wave of mining sector mergers and acquisitions.
Institutions, in the meantime, appear poised to unleash a wave of even more capital into crypto markets. Bitcoin spot ETFs have been aggressively accumulating BTC since launching on January 11, now holding over 831,000 BTC collectively — 4.23% of total supply. Analysts predict major investors will start buying in, alongside news that Morgan Stanley and Wells Fargo may soon offer their own Bitcoin ETFs. Meanwhile, fading hopes for a SEC-approved Ethereum ETF by May seem to have dampened ether trader enthusiasm.
When it comes to prices—historic data shows Bitcoin’s price tends to fluctuate around halving events, but broader uptrends often emerge afterward. Based on past cycles, I forecast BTC trading in the range of $72,000–$75,0000 on halving day, with more substantial price discovery likely playing out in the months following. While short-term volatility around the halving remains difficult to predict, the medium and long-term outlook point to positive momentum once the dust settles.
Market post-having
Forecasts vary. For instance, notable Bitcoin bull Fred Krueger used historical data to forecast BTC potentially reaching $195k by the end of 2024 post-halving, then surge as high as $500k within two years before a major correction. On the flip side, pessimists call for declines or even extended stagnation fueled by shifting demand and economic wildcards like inflation or monetary instability.
My outlook is more balanced. I expect Bitcoin to rise initially, followed by some slowdown, a possible dip, and stabilization at $70-80 at some point — still a healthy gain that I would welcome. In my view, we’re likely to see a temperate market with modest price swings overall. As always, outcomes for HODLers will hinge on diverse factors like investor sentiment, market demand, and evolving trading conditions.
As with past halvings, prices often rise in Bitcoin’s wake. But investors should weigh all variables at play.
Profiting from volatility pre- and post-halving
In the lead-up to a halving event, accumulating crypto can be an effective strategy — betting on prices rising as scarcity looms and speculation mounts. Media hype and growing uncertainty pre-halving also amplify market volatility. Savvy traders can capitalize on these price swings by trading short-term positions. And since altcoins tend to follow Bitcoin’s volatility, similar plays are possible there while still HODLing core BTC stakes or swinging only a portion while HOLDing the rest. Derivatives like futures contracts additionally allow one to hedge positions or speculate on movements with defined risk parameters.
After the halving dust settles, closely observe how markets react to the new reality of reduced block rewards. Often, volatility persists in the immediate aftermath as prices oscillate finding updated equilibrium levels — offering nimble traders potential profit windows. During this adjustment phase, tactical swing trading can capitalize on price fluctuations before stability takes hold. Of course, the time-honored HODL strategy remains appealing for investors betting on appreciation in Bitcoin’s new supply-constrained era.
Looking at strategic approaches, dollar-cost averaging (DCA) remains a steady standby — involving buying set amounts of crypto at regular intervals, no matter the price. Algorithmic bot trading like Bitsgap’s can also systematically execute trades per customized rules linked to market signals, capitalizing on volatility and inefficiencies faster than humanly possible. And diversifying across crypto assets allows one to harness upside while smoothing out risk impact when prices unpredictably swing.
So, as you can see, a multitude of options exist to align strategies with one’s forecast for coming shifts in supply dynamics. The key is mapping out plans suited to personal risk tolerance amidst the volatility ahead.
Conclusion
The consensus view sees halvings as fundamentally bullish — slashing new supply injection rates while demand holds or strengthens, setting the stage for price increases per the immutable laws of economics. True to form, past halvings catalyzed epic Bitcoin bull runs over succeeding 12-18 month horizons, minting fabulous new highs.
Yet rather than fixating on pie-in-the-sky scenarios of Bitcoin reaching fanciful valuations, savvy traders focus on pragmatically capitalizing on the guaranteed volatility using time-tested tactics — selling peaks, buying dips, and HODLing core positions for maximum upside exposure. Sophisticated algorithmic trading bots additionally remove emotions and automate execution, allowing one to systematically optimize returns.
