The approaching halving event for Bitcoin has caused a notable downturn in the market, leading to concerns about a potential bear market. While Bitcoin itself experienced a significant 19% drop, altcoins suffered even more dramatic losses, with some dropping as much as 70%. Given this pattern, investors are closely watching the future of cryptocurrencies as the halving event approaches.

Status Before the Bitcoin Halving

In the past, Bitcoin halvings have triggered bullish trends. The forthcoming event is expected to significantly reduce Bitcoin supply, potentially driving prices higher if demand remains stable. However, market analyst Garry Kabankin from Santiment pointed out that major events like halvings are influenced not only by fundamental factors but also by emerging rumors.

Kabankin noted that the recent price movements in Bitcoin and altcoins are not solely due to a market downturn but are also influenced by circulating rumors. The sharp drop in altcoins, even more drastic than Bitcoin, indicates high volatility and speculative trading behavior before such significant events. The reduction in block rewards post-halving may ease supply pressure in the market.

Anticipated Impact of the Halving

The real impact of the halving event may become more visible in the coming weeks as the market adjusts to the new supply conditions. The effects of Bitcoin's scarcity and its adjusted value can be better understood over time. The recent price decline reflects cyclic patterns observed during previous halvings, suggesting that corrections are following an expected pattern.

Kabankin emphasized the importance of monitoring social sentiment and whale activity for insights into immediate market signals. He also highlighted the significance of the Market Value to Realized Value (MVRV) ratio in determining market sentiment and identifying overvalued or undervalued assets within a specific timeframe. Keeping an eye on the average age of cryptocurrencies can reveal broader market movements and selling pressure.

Considering technical analyses, support levels, and on-chain indicators can assist investors in navigating uncertain market conditions. An increase in stablecoin supply on exchanges may indicate bullish expectations and investor participation in buying assets. Higher trading volumes could further support an upward trend in the market, indicating a potential accumulation phase for a bullish run.

Investors should remain vigilant about resistance levels and on-chain signals to identify possible reversals in market trends. Monitoring these factors can help guide investors when market direction is uncertain.