Bitcoin’s Mid-Halving Event Is Upon Us, But Analysts Expect Price Pattern To Be Broken

April 11, 2022 will mark Bitcoin’s latest mid-halving point. A halving is a key aspect of Bitcoin’s life cycle, and it occurs after every 210,000 blocks have been mined, which is equivalent to roughly four years. In a halving, the transactional fee or block reward gained from Bitcoin mining is reduced by half. Block rewards were originally pegged at 50 Bitcoin (BTC) per block.

Current Halving Cycle to Buck Price Patterns

In late 2012, the block reward was reduced to 25 BTC per block. In mid 2016, during the next halving, the block reward was further reduced to 12.5 BTC per block. Finally, in 2020, when this current halving started, the block reward was cut to 6.25 BTC per block. The next halving will occur in 2024, and the new block reward rate will be 3.125 BTC per block.

What this means is that after every halving, Bitcoin miners usually have to use greater amounts of energy to create fewer bitcoins for a much lower reward. Essentially, the only way bitcoin mining makes economic sense with each halving is if the price of BTC goes up.

A price pattern seems to have emerged in the last few halving cycles. In this pattern, the price of BTC typically experiences a bull run in the periods just before and immediately after a halving event.

But soon after the bull runs, there has always been an inevitable crash, followed by long crypto winters, which are often exacerbated by low market sentiment until the next halving event comes around.

Bitcoin’s Halving Ripple Effect

With the market primed for the mid-halving point, a number of market observers have claimed that this mid-halving event might see Bitcoin’s price behavior deviate from previously established patterns.

Experts, including analysts from Santiment, the leading on-chain and social metrics website, have suggested that halving events may no longer have the same impact on the Bitcoin market as they did in the past, largely because of the inflow of institutional capital into the Bitcoin market.

In previous halving cycles, BTC prices were largely driven by small individual investors. But in this current cycle, much of Bitcoin’s market performance is influenced by major institutional investors who often buy hundreds of millions of dollars’ worth of BTC in one go.

Ethereum Grows Stronger Against Bitcoin

Meanwhile, Ethereum (ETH) made slight gains after recording a fall in the past few days. At the time of writing, the price of ETH stood at $3,527, which was a 1.42% rise in the last 24 hours. 

ETH has grown stronger against BTC and gained nearly 7% in the past week. And with the second-largest crypto by market cap set to transition to a Proof-of-Stake mechanism, it is expected that ETH use cases will go up quite considerably.

This increase in uptake could potentially see ETH’s fledgling dominance over BTC grow even stronger.