As the countdown to Bitcoin halving enters the final 140 days, investors around the world are eagerly watching this event. Bitcoin halving is an inherent mechanism designed to control the supply of Bitcoin, thereby affecting its price. So, when the halving comes, investors are full of a question: Will the halving definitely bring about a rally? Let's delve into this topic together.

Before exploring the impact of Bitcoin halving, we first need to understand what Bitcoin halving is. Bitcoin halving refers to the fact that the Bitcoin mining reward will be halved every time the Bitcoin network mines 210,000 blocks. This means that miners will receive fewer Bitcoins as rewards, thereby reducing the amount of new Bitcoins put on the market, which in turn affects the balance of market supply and demand.

After the past two Bitcoin halving events, Bitcoin prices have risen significantly. This phenomenon has triggered the expectations of many investors that Bitcoin halving will bring about a surge in prices. However, history is not inevitable, and market trends are affected by many factors, so investment should be cautious.

On the one hand, Bitcoin halving will lead to a reduction in the supply of new Bitcoins, which may have a positive impact on prices. A reduction in supply usually leads to a rise in prices because Bitcoin becomes more scarce in the market. This scarcity may stimulate investors' enthusiasm for buying and drive up prices.

On the other hand, Bitcoin halving is not the only factor that the market is concerned about. Global economic conditions, political events, regulatory policies, etc. may affect the volatility of Bitcoin prices. Especially in periods of high volatility in financial markets, Bitcoin's attributes as a safe-haven asset may be magnified, affecting its price performance.

It is worth mentioning that the Bitcoin market has high volatility and uncertainty. Investors need to have full risk awareness and market cognition when participating in Bitcoin transactions. Excessive speculation may lead to investment losses, so investors are advised to be cautious about the impact of Bitcoin halving.

In general, although the Bitcoin halving countdown has aroused heated discussions and expectations in the market, investors should be rational about price fluctuations. Historical data can be used as a reference, but it should not be the only basis for investment decisions. When investing in Bitcoin, you need to carefully assess your own risk tolerance and avoid blindly following the trend.

Finally, the Bitcoin halving event will continue to attract market attention and will also become the focus of discussion among investors. No matter how the price fluctuates, it is important for investors to stay calm, invest rationally, seize investment opportunities, and avoid risks. I believe that as the Bitcoin halving approaches, the market will usher in more changes and challenges. Let us witness the future development of the Bitcoin market together.

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Coin Circle (120bTC.CoM) News: Bitcoin has not seen a clear decline since its rise in mid-November. However, according to BitcoinBlockHalf data, as of press time, there are only 139 days and 22 hours left before the fourth Bitcoin halving. The current estimated time point is about April 22, 2024, when the Bitcoin block reward will drop from 6.25 BTC to 3.125.

139 days left before Bitcoin halving

 Review of past halvings

The background of Bitcoin halving being a bull market narrative comes from the increase in scarcity, so it is believed by the market to help push up the price of the currency. It is worth mentioning that in the past, halving usually does not immediately trigger a Bitcoin rally effect, and it takes several months to a year and a half to ferment. According to statistics:

 First halving: In 2012, about 12 months after the peak (November 2013), the price of the currency rose by 8450%

 Second halving: In 2016, about 17 months after the peak (December 2017), the price of the currency rose by 290%

 Third halving: In 2019, about 18 months after the peak (November 2021), the price of the currency rose by 560%

Is every rise in Bitcoin really related to halving? Coinbase analyst David Duong previously wrote a report summarizing the background of Bitcoin's past three halvings, pointing out that Bitcoin halving events happened to coincide with some important historical monetary and fiscal policies:

 In 2012, the Federal Reserve began to purchase mortgage-backed securities and long-term Treasury bonds for the third round of quantitative easing (QE3).

 In the second half of 2016, Brexit triggered fiscal concerns in the EU and the UK, leading to an increase in BTC purchases.

 In 2020, central banks and governments around the world responded to the COVID-19 pandemic with unprecedented fiscal stimulus, which pushed up global liquidity.

Therefore, he believes that in addition to paying attention to the supply and demand dynamics of BTC, investors should also clearly understand the market background and need to understand the impact of the US dollar trend, interest rates and global liquidity.

Except for the third halving, the evidence that these halving events support Bitcoin price trends is not entirely clear.

 Bitfinex: Bitcoin circulation velocity is approaching a new historical low

According to Bitfinex's latest market report on November 30, the current Bitcoin circulation velocity, that is, the Bitcoin transaction frequency indicator, is at a low level since 2011, at 15.78. Compared with the previous bear market cycle, the peak of Bitcoin velocity reached about 80, indicating a significant change in market sentiment.

Bitfinex analysts pointed out that the current supply and demand state is that holders are reluctant to sell, while buyers are actively looking for entry opportunities. 83.7% of current holders are in a profitable state, but the selling pressure is still relatively small. One of the reasons is that the actual size of these unrealized gains is still small.

The report also pointed out that in the future, as the price of Bitcoin rises, the transaction speed of Bitcoin is expected to begin to increase, and the number of dormant Bitcoins will decrease. This transformation has a high probability of occurring because long-term holders begin to sell their holdings and convert their unrealized gains into realized profits.