Bitcoin without clear direction ahead of halving. Will the decline continue?

Bitcoin saw a significant decline in... the costs Since last weekend, following the Iran-Israel conflict, while Bitcoin fell 10% last week, some altcoins have lost more than 30% of their value, sparking concerns about a potential bear market. But are we seeing bullish signs thanks to halving?

Bitcoin and alternative currencies decline ahead of the halving... but are we seeing bullish signs?

Historically, it was Bitcoin halved- a scheduled reduction in the reward for mining new blocks - boosting cryptocurrency market sentiment. This event effectively reduces the supply of new Bitcoin, which stimulates the rise in the price of the cryptocurrency given the scarcity that characterizes the currency.

Gary Kapankin, market analyst at Santiment, says the market cannot react to fundamentals alone, especially during periods of significant events such as halvings. He suggests that recent drops in cryptocurrency prices may be a correction rather than a true drop in value:

“The sharp decline in altcoins, even more than that of Bitcoin, highlights the increased volatility and speculative trading that can precede such events. This is a reminder of the market's sensitivity to changes in supply dynamics, as a decline in block reward after a reduction may result in lower expectations of a reduction in supply pressure.

Kapankin explains that investors' expectations can be inferred from analyzing the behavior of cryptocurrency miners, especially regarding sales operations ahead of tomorrow's halving event. However, the true impact of the halving will only become clear when it occurs and the market adjusts to the new supply rate.

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Kabankin believes that the halving will be followed by a “transaction reassessment” phase. At this point, it is important to “monitor social sentiment and whale behavior for more immediate signals to guide the market.”

It should be noted that the market value/realized value (MVRV) indicator is considered one of the most important indicators. Analytical tools Who analyzes and interprets market sentiment. Essentially, this indicator indicates whether an asset is over/undervalued at any given time.

According to Kabankin, investors should also closely monitor the average lifespan of the coin. Significant declines can indicate increased movement and potential selling pressure, indicating broader changes in the market.

Additionally, a significant increase in the supply of stablecoins to exchanges could indicate a willingness to buy, indicating bullish sentiment. Additionally, an increase in trading volume can indicate growing support for a trend. This may indicate a healthier build-up to an uptrend.

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As the cryptocurrency market is still very volatile, it is essential to pay attention to the signals that allow you to predict its next movements. The halving has often been the obvious start of a bull market, but there is no absolute certainty about this rule. Especially since market conditions have changed a lot, and investors and traders have matured following the 2022 crypto winter.