Failed expectations after the bitcoin halving: greed gives way to disappointment

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There were many experts who explained the possible consequences of the halving on the price of bitcoin (BTC). Taking into account data from previous halvings, it follows that the price of the digital currency does not usually rise once the event occurs. In contrast, historically, the cryptocurrency only experiences notable price increases in the 5-6 months following each mining reward reduction event. It happens because by issuing fewer bitcoins over time, halving makes it more likely that the value will increase (provided there are constant levels of demand). However, despite these explanations, The expectations surrounding the fourth halving of this 2024 were very high, generating, among many, the hope that the event would lead to a substantial increase in the price of the digital currency. Something that has not happened in these two weeks after the reduction. In this way, contrary to what many expected, the price of bitcoin plummeted in these post-halving weeks. So, since the reward halving, until today, the value of BTC fell by more than 11%. A disappointment for investors who were betting on a rapid rise in price. Pre-halving enthusiasm had been boosted by a 60% increase in the price recorded by BTC since the beginning of the year, reaching an all-time high of more than USD 73,000 in March. But this progress has been slowed down after the halving, with a sideways price at USD 66,000, although it now fell below USD 57,000 this May 1. This is a situation that has led many to disappointment, seeing that expectations are not met. A fact that becomes evident in the values ​​that measure market sentiment, such as the fear and greed index, which reflects the feeling of fear that spreads in the market, at the time of this publication. According to the logs provided by the Alternative browser, this number means that Bitcoin market sentiment has gone from neutral to fearful. According to this metric, greed that was denoted high (73) fell sharply in 24 hours after staying within the ranges of extreme greed for several months, including the weeks before the halving.

The market greed index, which remained high throughout the month of April, fell to neutral on May 1. Source: Alternative. The fall in the greed index coincides with the collapse in the value of BTC this Wednesday, which was also reflected in searches for the word bitcoin on the Internet. As reflected by Google Trends, the searches they shot to their highest point today (100), possibly due to interest in knowing the cause of the fall. As BitcoinDynamic has widely reported, these searches are usually influenced by several factors, being price changes up or down one of the most relevant. Although the halving is another topic that attracts people's interest.

Searches for the word bitcoin fell after the halving, although they experienced a rebound on May 1. Source: Google Trends. In that sense, we must also consider that the cryptocurrency market is highly influenced by macroeconomic outlook. Among them, the rebound in inflation and the forecast that the Federal Reserve (Fed) will apply tougher measures in the coming months. Additionally, the lack of approval of spot ETH exchange-traded funds (ETFs) by the SEC may also be influencing the market reaction. It is worth reiterating that the current movement of the price of bitcoin, in this post-halving period, it is not surprising. Especially considering the extraordinary bullish momentum leading up to the event. An indicator that the market I had already anticipated the rise and adjusted the price, as expected by several analysts before the reduction of rewards.