Bitcoin’s fourth halving has sparked speculation about significant price surges, but Glassnode, an analytics firm, advises that investors should “ground expectations” based on historical data.
The Bitcoin halving happened less than a week ago, leading to a 50% reduction in supply inflation, increasing the issuance scarcity.
The halving has historically impacted price performance. However, Glassnode highlights diminishing returns and shallower drawdowns seen over time due to the market’s growth and capital flow requirements.
Glassnode observes diminishing returns comparing epochs, with the second showing a price increase of 5,315% and a maximum drawdown of 85%. Meanwhile, the fourth epoch saw a more modest 569% increase and a 77% drawdown. The report notes similar price performance across the last three cycles before the halving, with increases ranging from approximately 200% to 300%.
However, the current cycle is different, with bitcoin surpassing the previous all-time high (ATH) before the halving, a phenomenon not observed in previous cycles. Glassnode’s report notes the significant unrealized profit held by investors during this halving event, with the MVRV Ratio indicating an average paper gain of +126%.
The fourth halving is also different when comparing bitcoin to gold. For the first time in history, bitcoin’s steady-state issuance rate of 0.83% becomes lower than that of gold, which is approximately 2.3%.
Regarding network fundamentals, the hash rate continues to grow, indicating increased investment in mining infrastructure. Miner revenues, while exhibiting a diminishing growth rate in USD terms, have seen a net expansion, with cumulative revenue exceeding $3 billion over the past four years.
The realized cap, which measures the capital invested in bitcoin, supports the now $1.3 trillion market cap, marking a 439% increase over the last epoch.
Glassnode also noted that despite volatility and negative headlines, Bitcoin’s transfer volume has reached $106 trillion over the last four years, which shows the network’s capacity for settling transactions.
Meanwhile, Glassnode co-founders have provided insights into bitcoin’s potential rebound in a recent post on X. They suggest a potential surge to $72,000 and note the 50-day Exponential Moving Average (EMA) at $62,000 as a key support level.
They further advised investors to utilize short-term dips in BTC’s price as valuable buying opportunities, especially during the ongoing consolidation phase within the broader bullish trend that the asset has been experiencing.
According to CoinGecko data, bitcoin’s price is trading at $66,50, representing a slight 0.2% increase over the last day and a 5.0% rise over the week.
The post Investors Should Ground Expectations Post-Bitcoin Halving: Glassnode appeared first on CryptoPotato.
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