The halving will take place a hundred days before it starts
According to CoinDesk, the latest research from ETC Group shows that the bullish impact on Bitcoin caused by halving usually begins to appear 100 days after the halving.
As we all know, the Bitcoin block reward halving is a built-in code that takes effect every 210,000 blocks (equivalent to four years). This four-year event will reduce the amount of money miners receive from validating transactions. Block rewards are reduced by 50%. Its main purpose is to control the supply of Bitcoin and ensure that it becomes scarce over time and does not suffer monetary inflation like fiat currencies. The first halving was implemented in 2012, reducing miners’ reward per block from 50 BTC to 25 BTC, while the most recent halving was implemented on April 20, further reducing it to 3.125 BTC.
Previous halvings have paved the way for multiple major price increases, with most of the increases occurring after 100 days. Andre Dragosch, head of research at ETC Group, said on X:
“Today is exactly the 100th day after the Bitcoin halving event on April 20. The market’s memory is often short, but the supply deficit caused by the halving should only take effect from now on.”
Andre Dragosch came to this conclusion after analyzing data before and after three halvings in 2012, 2016 and 2020. Research shows that the average excess performance (i.e., the difference in performance X days after halving and X days before halving) in the 100 days after halving increased significantly and became statistically significant, with its "T value" exceeding 2% .
The T value is a statistical index used to judge the deviation of the sample mean from the population mean in hypothesis testing. This deviation is affected by sample variability.
Andre Dragosch said in an interview:
“The main conclusion is that the performance difference becomes statistically significant (T-score > 2) 100 days after the halving, and then becomes increasingly significant approximately 400 days after the halving.”
The chart shows that starting on the 100th day after the halving, average outperformance rose to over 100%, eventually peaking in the four-digit range.
Bitcoin approaches the 70,000 mg mark
At the time of writing, Bitcoin has surpassed $69,000 and is heading towards the $70,000 mark, a new seven-week high and only 5.7% away from its all-time high of $73,757.
Recent positive sentiment toward Bitcoin has been driven largely by speeches at the Bitcoin 2024 conference by two U.S. presidential candidates and a prominent Republican senator.
Independent presidential candidate Robert Kennedy and Senator Cynthia Lummis have talked about plans to create a strategic Bitcoin reserve for the United States, while former President Donald Trump has said that the government will no longer sell Bitcoin if he is re-elected. If these plans come to fruition, it could create significant buying pressure and supply shocks to the Bitcoin market.
In addition, the personal consumption expenditure index rose only 0.1% in June, which increased market confidence in a possible interest rate cut in September as inflation was brought under control.
The Federal Reserve will make an interest rate decision on July 31. Although the market is generally expected to keep interest rates unchanged, data from the Chicago Mercantile Exchange (CME Group) shows that the probability of maintaining interest rates at 5.25% to 5.5% is 95.9 %.
Expectations for a possible interest rate cut in September are increasing, with an 85.8% chance of a rate cut to 5.0% to 5.25%. If realized, this would be the first interest rate cut since March 2020.
Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
