Will the optimism around Bitcoin help prices post 2024 halving?

• BTC’s price movement at the time of publication was very similar to its trajectory during 2016 and 2020.
• Nearly 75% of the supply was in the custody of diamond hands, akin to the 2016 and 2020 cycles.

The month of August may be drawing to a close, but not before witnessing the elusive volatility making a comeback into crypto markets. After a mid-month free fall, Bitcoin [BTC] pumped earlier in the week amidst growing anticipation surrounding its spot exchange-traded fund (ETF) applications.

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Maximalists believed that this optimism would keep the king coin in good shape leading to the all-important halving event, which is around eight months away.

Will history be repeated?

The quadrennial occurrence cuts miners’ block rewards in half, eliminating the number of tokens in circulation. Historically, these occurrences have preceded bull markets, thus raising hopes for a 2021-like scenario next year.

Moreover, the ongoing trends also revealed some resemblance to previous pre-halving periods.

According to CryptoQuant analyst JA Maartun, BTC’s price movement at the time of publication was very similar to its trajectory during 2016 and 2020. Maartun predicted that the relative stability would continue until the halving.

Source: CryptoQuant

Apart from the price action, the accumulation activity by long-term holders (LTH) was also like history repeating itself. Nearly 75% of the supply was in the custody of these diamond hands, akin to the 2016 and 2020 cycles.

Source: CryptoQuant

Furthermore, Bitcoin’s hash rate, or the computational power committed to create blocks on the network, rose steadily over the years.

As their overall earnings from each block would drop from 6.25 to 3.125, miners would be tempted to use most of their resources to reap the higher rewards until the halving. This, in turn, could push the hash rate even further.

Source: CryptoQuant

Is HODLing mentality here to stay?

Having noted the above patterns, a fascinating new finding came to light. Since the last halving in May 2020, Bitcoin’s supply on exchanges underwent a trend reversal. As the HODLing sentiment gained more currency, LTH users started to withdraw their coins in favor of self-custody.

How much are 1,10,100 BTCs worth today?

Therefore, it would be interesting to see how this trend shapes us after the next halving. Will LTH sell a major portion of their holdings in the event of a bull market, or will they continue to store BTC as a safe-haven asset?

At the time of writing, BTC was priced at $27,254, per Santiment data. The positive weighted sentiment underscored the bullish mood among market participants.

Source: Santiment