Bitcoin Accumulation Surges Ahead of Halving Event
The Essentials in Brief
The Bitcoin halving is imminent, and the tension in the crypto community is rising. A remarkable increase in BTC accumulation has been recorded, with more than 27,000 BTC flowing into accumulation addresses. Despite a recent price drop, investor confidence remains unbroken, driven by the expectation of a price increase after the halving event. This phenomenon and its potential impact on the market deserve a closer look.
Increased BTC Accumulation Ahead of Halving
In the days leading up to the halving, Bitcoin accumulation has reached a new high. On April 16, inflows of over 27,000 BTC were registered in accumulation addresses. These addresses are characterized by having no outgoing transactions recorded, a balance of more than 10 BTC, and are not linked to centralized exchanges or miners. The last transaction on these addresses took place within the last seven years.
Market Participants Remain Optimistic Despite Price Drop
Despite a recent drop in the Bitcoin price by 13% within a week, market participants continue their accumulation. This strategy is supported by the historical observation that Bitcoin’s price significantly increased after previous halving events. Data from Bloomberg show that after the halving in 2012, the price of BTC rose by over 8,000%, after the halving in 2016 by 295%, and after the halving in 2020 by 559% after one year.
Decreasing Selling Pressure and Rising Market Volatility
A decrease in selling pressure is evident from the steady decrease in BTC holdings on crypto exchanges. In the last week, the amount of BTC held on exchanges fell by 1%. Currently, about 1.94 million BTCs worth approximately 119 billion US dollars are held on exchanges. With the halving only hours away, market volatility is increasing, as indicated by the widening gap between the upper and lower bands of the Bollinger Bands indicator on the daily BTC chart.
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Our Assessment
The upcoming Bitcoin halving is an event of great significance, not only for investors but for the entire crypto community. The increased accumulation of BTC in the run-up suggests strong confidence in the positive price development after the halving. While short-term market volatility can pose a challenge, the historical price development suggests that long-term oriented investors could potentially benefit from significant gains. However, it remains important to closely follow market developments and pursue a well-considered investment strategy.
Sources: Bloomberg, CryptoQuant
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