_{Authors: Trav and TheOpenChain}

Waking up yesterday morning to see Bitcoin over $60k was a surreal!

I blinked 5 times, made sure I was awake, then felt the excitement build as I realized it was happening!

Not soon afterwards though, I remembered the last time I felt this way, and how soon afterwards there was a massive dump and the vibe tanked. Is this going to happen again? Or is this just the beginning.

Let’s take a look at all the clues to see if we can find an answer.

The Bitcoin Halving And It’s Impact

We all know the Bitcoin halving is coming on April 25, 2024. Here is a quick reminder on how this impacts BTC.

The mining rewards for validating transactions will be cut in half, which will lead to Bitcoin scarcity. 

In the context of supply and demand, reducing the rate at which Bitcoin is introduced into circulation will lower the overall supply, which could increase demand and… hopefully… achieve the outcome we ALL want to see:

• Boost Bitcoins price!

As we write this, 93.5% of all Bitcoin has already been mined!

So how will this affect price?

 Let’s look at the past Bitcoin halving’s to get a sense of what happens.

The first halving did not see huge gains 70 days prior, only a 2.9% increase. This was followed by a huge pump of 91% in the 70 days following the halving.

The 70 days leading up to the second halving was slightly different to the first. We saw a 45% pump for Bitcoin and then a nearly 8% drop in the period after the halving.

The third halving we saw in 2020 behaved differently again. We saw a 20% pump this time for the 70 days prior to the event and a nearly 3% pump continuing the 70 days after. After that, the price increased significantly.

We are all wondering what is going to happen this time…

It is always going to be hard to predict the next step. This time it feels even more unpredictable due to the recent ETF approvals and accumulation by asset managers and firms.

Whales are also accumulating instead of selling. Just a week ago Bitcoin holdings reached their lowest level on Coinbase since 2015 after withdrawals of £1B in BTC. Just 4 days ago there was a monster buy of 26,200 BTC by a single individual wallet not linked to ETF’s!

The market feel’s very different to past halving’s, especially with this sense of scarcity being created.

If we are looking at averages, then a 28% increase 70 days after the halving is a realistic target (NFA).

Let’s keep an eye on where Bitcoin lands at the halving!

A Closer Look At The Charts

Because Bitcoin does seem to follow cycles, let’s take one more look at the last halving in 2020.

Why?

• Because of all the previous halvings, the state of the current market has more in common with 2020 than any other.

• Even though the past doesn’t guarantee a repeat performance, it can give us a clue about how people may react.

• Price around the last halving looked very similar to how the crowd behaved leading up to the Bitcoin ETF approval.

In a nutshell, there was likely a buy the rumour/sell the news phenomenon. Investors were hyped about the event and bought into Bitcoin beforehand. After the halving, there was a several month of cool off which included profit taking and sideways movement.

The cause of the 2020 bull run can’t be entirely based on the assumption that it was the Halving that catalyzed it. There are other events to consider, such as a surge of volume from the COVID lockdown where millions of people entered the crypto market.

It IS possible that history may repeat itself. With the highest levels of Bitcoin scarcity coming up though… and huge amount of volume in the market from the ETF… things are looking hopeful.

Let’s take a closer look at the charts.

That bullish GOD candle yesterday was a sight for sore eyes. At that time, price came within 5k of Bitcoins All Time High (ATH) with momentum that could break through a mountain!

Seeing the volume on the 2 hour chart behind this move is incredibly encouraging. Even on those massive red volume days, comparing volume to price we can see that the red candles barely even moved. This is a strong bullish signal and give’s this trend credibility.

The the $60-70k range has some of the largest movements in the history of Bitcoin, so here’s what I expect:

• While price remains in this range, price will have large swings.

• There is a ton of sell pressure on the top of this range and it will require a massive amount of bullish momentum to break through.

What to do with this info?

• If you’re not already in a Bitcoin position, I would wait until we either break out and show proof that we can hold above the ATH.

• Wait for a correction and buy the dip.

On Chain Data And What It Tells Us

On-Chain Data is what makes crypto great. All transaction information is available for us to see.

1. Market Value to Realized Value (MVRV) - BEARISH

This indicator shows us how much profit or loss Bitcoin holders are for:

• 30 day holders(red)

• 365 day holders (yellow)

The higher the metric, the more profit holders are in. From backtesting, it’s relatively consistent that when the MVRV spikes (like it is doing now) what follows is a drip in price where holders take profit.

Considering both the 30 day and 365 day MVRV are at their highest since the previous bullrun), the likelihood of a short to medium term correction is high.

2. Exchange Funding Rates - BEARISH

This metric gives tells us how people are positioned (on the top derivative exchanges) in terms of betting Long or Short on Bitcoin.

As we can see, there is a massive spike on long positions, telling us that the crowd is betting that price will continue to run.

If we look back, however, to other times we’ve had massive spikes in the funding rates, it wasn’t long after that the price dumped.

This dump happens for two reasons:

• investors eventually take profit

• large entities take this opportunity to liquidate long positions, to tank the price and scoop up Bitcoin at a discount price.

3. Whale Activity - BEARISH

This metric is very interesting. We can tell a couple of things:

• wallets holding between 10-1000 Bitcoin have been decreasing (likely profit taking) since early this year.

• wallets holding between 1000=10,000 BTC have been sky rocketing, and recently began to drop quickly.

What does this mean and how does it help us?

• Whale transactions move the market.

• That rise in 1000-10,000 BTC wallet address began right around when the Bitcoin ETF was approved, which may suggest that these are institutional level whales increasing their holdings.

• Their recent dramatic downturn is an ominous sign, which could mean profit taking and upcoming price reversal.

4. Mean Dollar Invested Age (MDIA) - BULLISH

Of all the indicators so far, I am the most excited about this one.

This indicator gives us a longer term prediction of what Bitcoin’s price may do. It basically tells us when Bitcoin holders simply hold their supply, or wake up and move it around.

When this indicator starts to dip, price in the past has had it’s largest runs in the history of Bitcoin… Which is what the MDIA is doing currently. How long will this run last? It’s impossible to tell, but the downturn has only just begun.

We use the tool Sanbase by Santiment to access all of this incredible data. Check out this link to give it a shot for yourself.

ETF Updates And What This Means

ETF’s have bought around 272,000 Bitcoin in the last 30 days. To put this in perspective, there is approximately 2ml BTC in exchanges.

They have been buying at a rate of nearly 10,000 BTC per day and a combination of funds with ETFs have managed to accumulate nearly 3.9% of the total supply of Bitcoin.

In that same 30 day time frame, only approximately 25,000 BTC has been mined into circulation. The halving will reduce this to 12500 BTC in that same 30 day period.

Another thing to consider is the trading volume in ETF’s is only increasing. ETF trading volume surpassed £3.24B only 2 days ago lead by BlackRock who alone did over $1B.

If ETFs keep buying at this rate, then we would run out of BTC in exchanges or BTC that are mined in a matter of months! However we fully expect this rate accumulation by ETF’s to cool down.

The narrative that there could be a supply shock after the halving, driven by ETFs might still play out. Which could send the price of BTC to Valhalla.

Now let’s put this all together.

1. With the Halving coming up in May 2024, price may plateau afterwards for several weeks-months then continue to run up.

2. The price action chart shows a ton of momentum behind this rip, and it will take some effort to either reverse OR break through Bitcoins’s ATH.

3. This price range will likely send price swinging up and down in large moves with a lot of volatility.

4. Most of the on-chain data suggests an upcoming correction for profit taking, before continuing it’s run up.

5. The ETF not only brings a ton of new attention to Bitcoin, but it’s also scooping up it’s supply at an unprecedented rate. This may have a dramatic effect on boosting price in the future.

How to position yourself based on this information (not financial advice):

1. Use caution when entering any new positions. With the high levels of volatility in this range, short term trading will be very difficult.

2. Potential buy signals:

   1. Upcoming dips (with 50k offering a strong base of support)

   2. Break and hold above the ATH

3. If you are in the green, consider taking at least partial profit.

4. Keep an eye open for a shift of liquidity from Bitcoin to Altcoins, and consider DCA’ing into strong assets.

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