Glassnode warns that Bitcoin traders will have to adjust their strategies in the event of this halving.

Important facts:
  • For the first time, Bitcoin has surpassed the all-time high of the previous cycle before the halving.

  • ETFs will change the market dynamics for BTC.

With the halving approaching, Bitcoin (BTC) traders will have to adapt and change their strategies. The estimate comes from researchers at analytics firm Glassnode, who warn that traders will have to adjust their assumptions about the impact the event will have on the market.

In its most recent report, Glassnode it means especially how This price cycle differs from the historical behavior shown by BTC before previous halvings, “Not only has it grown tremendously this quarter, but it also reached an all-time high before stalling for the first time in history,” he says.

Furthermore, they cite entries on the spot ETF scene, such as A new player of weight and influence in the BTC market, And this can leave the famous “halving effect” with respect to price and future market movements.

As Bitcoin approaches its halving, the significant purchasing power of the ETF will eclipse the traditional supply squeeze effect expected from the halving. This dynamic introduces traders to the need to balance the historical impact of the halving with the contemporary impact of the ETF on the availability and price of Bitcoin.

glassnode

The fourth halving in Bitcoin history is less than a month away. It is estimated that it will take 27 or 28 days for the miners’ reward to be halved once again. Typically, it takes several months after that event for the price of BTC to break its all-time high from the previous cycle,

Bitcoin broke its ATH from the previous cycle ($69,000) and set a new mark near $74,000. Source: TradingView.

But, as Glassnode points out, this time it was different. This reality should lead traders to ask themselves new questions that should lead to a new way of operating with respect to the halving. And the most logical question analysts ask is whether the halving will act as a catalyst like in previous cycles or “other market dynamics are now determining the direction of the cycle.”

Demand for ETFs exceeds Bitcoin issuance

The market logic regarding the halving so far has been as follows: As the amount of BTC issued daily decreases, a programmed reduction of Bitcoin comes into effect. And in the event of a demand that persists or increases over time, necessarily and in accordance with the law of supply and demand, the price must increase.

But this dynamic has changed with the advent of ETFs. Or at least that’s what the behavior of these investment funds shows in their first two months in the market. “As we approach the halving, the impact of new Bitcoins mined and put into circulation is becoming less significant compared to the increased demand for the ETF,” he tells Glassnode. As we previously reported in CriptoNoticias, ETFs are taking a much larger amount out of the market than BTC being issued through mining, In this sense, they are controlling demand.

Demand for BTC from the ETF (blue line) far exceeds daily supply since issuance. Source: Glassnode.

Such has been the impact of ETFs on BTC’s behavior in the market that it became very clear last week. Driven by continued record investment figures for the Bitcoin spot fund in the United States, after setting its price at an all-time high, The cryptocurrency has corrected and fallen by 20% compared to the new ATH,

As we already mentioned, this decline was influenced by ETFs, which had negative capital inflows throughout this week. They remained locked in the red for 5 consecutive days, and saw outflows of nearly $900 million.

Now, BTC remains sideways between $63,000 and $65,000. And at the time of writing this article, Bitcoin It is trading at around $65,400.,

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