Bitcoin Halving 2024: BTC/USD Poised for a Breakout Ahead of Quadrennial Halvening

Bitcoin Halving Key Points

• The next halving is projected on April 19th 2024, in the evening US Eastern time.
• Historically, halving events have been associated with increases in Bitcoin's price, attributed to its reduced supply growth rate and increased scarcity.
• A breakout from Bitcoin’s recent $61K-$73K range is inevitable – see the key levels to watch from here below!

What is the Bitcoin Halving?

The Bitcoin Halving (or “Halvening”) is a fundamental aspect of Bitcoin's monetary policy, programmed into its blockchain protocol by its pseudonymous creator, Satoshi Nakamoto.

The process reduces the block reward — the number of bitcoins granted to miners for validating transactions and adding a new block to the blockchain — by 50% approximately every four years, or after every 210,000 blocks mined.

Bitcoin Halving: Historical Context and Schedule

The initial block reward was set at 50 bitcoins per block when Bitcoin was launched in 2009. Since then, there have been three halving events:

• November 28, 2012: The reward was reduced to 25 bitcoins.
• July 9, 2016: It decreased to 12.5 bitcoins.
• May 11, 2020: It was further cut to 6.25 bitcoins.

When is the Next Bitcoin Halving?

The next halving is projected on April 19^th 2024, in the evening US Eastern time, where the reward will drop to approximately 3.125 bitcoins.

What is the Purpose of the Bitcoin Halving?

The primary purpose of halving is to control Bitcoin's supply, creating a deflationary economic environment. By slowing the rate at which new bitcoins are created, halving helps to maintain scarcity and potentially increase the cryptocurrency's value, assuming demand remains steady or increases.

Bitcoin Halving: Potential Market Impact

Historically, halving events have been associated with increases in Bitcoin's price, attributed to its reduced supply growth rate and increased scarcity.

As “The Only Bitcoin Chart You'll Ever Need™” shows below, the strongly bullish “mania” phase of Bitcoin’s 4-year cycle (green) has historically kicked off after the halving, though it can take a handful of months before it kicks into gear in earnest:

Source: TradingView, StoneX

As always, it’s worth noting that past performance is not indicative of future results and factors beyond the halving will impact Bitcoin’s price.

Bitcoin Halving: What are the LONG-Term Implications?

The final Bitcoin is expected to be mined around the year 2140, at which point the maximum supply of 21 million bitcoins will have been reached. Post-2140, miners will primarily earn from transaction fees rather than block rewards. This transition could have implications for the security and viability of the Bitcoin network, relying more heavily on transaction volume and fees. Over this most recent cycle, there were some “green shoots” with fees rising slightly as alternative use cases for Bitcoin gained some ground.

Bitcoin Technical Analysis – BTC/USD Daily Chart

Source: TradingView, StoneX

Looking at the more traditional technical chart above, Bitcoin is sitting near the middle of its 6-week range between $61K support at resistance at $73K. Theoretically, the impact of the halving on the market should be priced in already – after all, the approximate date has been known for more than 15 years – but traders nonetheless appear hesitant to commit too strongly in either direction.

One way or another, a breakout from the recent range is inevitable, likely sooner rather than later. A breaish breakdown would open the door for a continuation down toward near $50K, where Bitcoin started the year, whereas a bullish breakout could bring $80K+ into sight quickly as traders buy into the post-halving “pump.”

-- Written by Matt Weller, Global Head of Research

Follow Matt on Twitter: @MWellerFX