Following the halving, miners could potentially liquidate bitcoin reserves worth $5 billion, exerting pressure on the price. This warning comes from Marcus Thielen, Head of Research at 10x Research.
#Bitcoin Might Trade Sideways for 6 months As Miners Could Sell $5bn of BTC -> Here is why: https://t.co/gLRgs8yyGg pic.twitter.com/zBLdV95MAl
— 10x Research (@10x_Research) April 13, 2024
“This overhang from the sell-off could last from four to six months, explaining why bitcoin might trade sideways during this period, as it has after previous halvings,” the expert believes.
If history repeats itself, the market will not see significant upward price movement until October, Thielen suggests.
According to him, historically, miners began accumulating reserves in the leading cryptocurrency several months before the block reward reduction. This led to a supply-demand imbalance, causing prices to rise before the halving.
In March, bitcoin’s price hit a record high above $73,000.
Thielen suggested that the largest public mining company, Marathon, might start selling off its accumulated digital gold reserves to smooth out revenue declines.
Currently, the firm mines 28-30 BTC per day. After the halving, these figures will drop to 14-15 BTC, but up to 133 days of additional asset supply to the market are expected, Thielen asserts.
“Other miners are likely to follow a similar strategy, gradually liquidating part of their reserves,” the expert believes.
If this scenario unfolds, miners’ sales could reach up to $104 million per day, “reversing the supply-demand imbalance that led to the pre-halving rise,” Thielen posits.
Regarding other digital assets, the expert suggested a similar scenario:
“Even if there is a correlation between the halving and altcoin rallies, as some predict, historical data shows it usually starts almost six months later.”
Earlier, Marathon CEO Fred Thiel expressed confidence that the upcoming block reward reduction is already priced into bitcoin.