Bitcoin Halving 2024: On-chain data reveals how to play this market?

The countdown to the Bitcoin Halving has begun, with only a few months left until the fourth halving in April. How will this event affect the BTC price? Why is the market looking forward to it so much? Let's start with on-chain data and historical patterns.

What is Halving? Why do we need to Halve?

Simple and straightforward: Every 210,000 blocks, the mining reward for miners is halved.

• Genesis Block of 2009: 50 BTC/block
• First Halving in 2012: 25 BTC/block
• Second Halving in 2016: 12.5 BTC/block
• Third Halving in 2020: 6.25 BTC/block
• Fourth Halving in 2024: 3.125 BTC/block (expected in April)

Why design it this way? Satoshi Nakamoto's core idea is simple—control inflation and simulate the scarcity of gold. The total supply of Bitcoin is fixed at 21 million coins, and the Halving mechanism ensures that the speed of new coins entering circulation gradually slows down. As of August 2023, over 19.46 million BTC are in circulation, leaving approximately 1.54 million coins until the cap is reached, with the expectation that all will be mined around the year 2140.

Historical Data Speaks: Does the price really skyrocket after the Halving?

Look at the market reactions during the past three Halvings:

The patterns behind the data: Halving itself does not directly determine price fluctuations, but will trigger a chain reaction of market expectations.

Why is this Halving attracting so much attention?

Three Catalysts:

1. Supply Tightening — The speed of new coins entering the market has been cut from 12.5 coins/10 minutes to 6.25 coins, and the Halving of miner revenue means a sharp reduction in new supply to the market.

2. Institutional FOMO Spreading — The US SEC is reviewing the spot BTC ETF, and once approved, large traditional financial funds will flood in, creating a tremendous pull on standard asset allocation logic.

3. Macroeconomic Trend Shift — The Federal Reserve's rate hike cycle may be nearing its peak, with expectations for rate cuts rising. Historically, such environments often favor risk assets.

How does Halving affect miners and investors?

The pressure on miners

The earnings are cut in half directly, and small mines are facing a survival crisis. But historical experience shows that:

• After the Halving, the mining difficulty usually does not decrease significantly (because large mining farms have optimized their cost structure in advance)
• Survivors are those participants who obtain cheap electricity and the latest mining machines.
• In the long term, if the BTC price rebounds, miner earnings can still be maintained at an acceptable level.

Investor's Opportunity

On-chain data shows that the best bottom-fishing window is 8-10 months before the Halving (when market sentiment is the most pessimistic). Crypto analyst van de Poppe pointed out that in the past two Halvings, the ETH/BTC trading pair bottomed out around 252 days prior, and this time may not be an exception.

Market Cycle Patterns (Based on Historical Review):

• Phase 1: Accumulation Period — 13-22 months of consolidation
• Phase 2: Rising Period — An upward trend lasting 10-15 months (there may be pullbacks in between but will rebound quickly)
• Phase 3: Adjustment Period — Approximately 12 months of bear market correction

Currently, BTC is at the tail end of stage 1, having been in a sideways trend for nearly 12 months, indicating that large holders are quietly accumulating.

How do institutions predict this wave of market?

Summary of target price levels (more conservative as it approaches Halving time):

• Pantera Capital — Breakthrough $150,000 within 2024
• Standard Chartered — Reach $120,000 by the end of 2024
• Stock-to-Flow model — Reaching $460,000 in May 2025 (but this model has always been overly optimistic)
• Cathie Wood (Founder of ARK) — Reaching 1.5 million dollars before 2030

⚠️ Pragmatic View: If we refer to the declining trend of percentage increases after previous Halvings, this round of increase is expected to be in the range of 200%-500% (the upper limit may be pushed higher if the ETF is approved).

Halving and Its Ripple Effect on Other Coins

BTC Halving ≈ The barometer of the entire crypto market. When BTC starts an upcycle, mainstream coins (ETH, SOL, etc.) often experience rotating increases, but the pace and magnitude vary significantly.

Especially the paired trading of Ethereum and Bitcoin often gets repriced before and after the Halving, and experienced traders will deploy in advance.

Practical Guide: How to Profit from This Halving?

Conservative Plan

• Regularly invest to accumulate BTC (DCA strategy) — Spread the trading pressure over each month/week to lower the cost.
• Spot holding coins - Waiting for the upward cycle in the second half of 2024

Advanced Plan

• Futures Swing - Use 120x leverage to go long at key support levels (risk must be strictly controlled, set a stop loss)
• P2P Arbitrage — Earn risk-free profits by taking advantage of price differences in global markets.
• Yield Mining — Use BTC for lending or staking to generate passive income

Radical Plan

• Spot-Futures Hedging — Buy spot while shorting futures to lock in the hedging ratio, capturing the volatility before and after the Halving.

Risk Warning

1. Halving does not equal skyrocketing — The market is driven by multiple factors (macro environment, regulation, technology, sentiment), and a single event does not determine everything.
2. Leverage Double-Edged Sword — Over 10x leverage can easily lead to liquidation during extreme volatility, beginners should be cautious.
3. History does not repeat — The institutional interest and policy environment in 2024 are completely different from those in 2020, and past patterns cannot be simply applied.
4. Time Cost — Even if it eventually rises, how do we assess the cost of time from now until the possible high point next year?

Bottom line: Do thorough research and risk assessment, and don’t let the Halving hype cloud your judgment. The core logic of holding BTC should be to believe in its long-term value, not to gamble on a short-term event.