Bitcoin bulls may have to wait at least two months for halving's impact, analysts say
Quick Take
- The bitcoin halving’s impact on market supply and demand dynamics may take over two months to materialize, analysts say.
- Some forecast a possible short squeeze in the altcoin and memecoin market.
The spot price of bitcoin has posted an 8% increase since the fourth halving was completed on Saturday, April 19.
According to analysts at QCP Capital, investors may have to wait around two or three months for the bitcoin halving's supply constraint to impact the market.
"The previous three halvings saw spot price move higher exponentially only 50-100 days after the actual halving day. If this pattern is repeated this time, bitcoin bulls still have weeks to build a larger long position," the analysts said in a Tuesday report.
Bitcoin supply and demand dynamics
According to Bitfinex analysts, the restrained bitcoin supply issuance post-halving is stabilizing the price and could encourage further price appreciation.
"The reduced daily issuance rate of bitcoin post-halving, estimated to add between $30 to $40 million worth of supply per day, contrasts sharply with the $150 million average daily net inflow from spot bitcoin ETFs, underscoring a significant supply-demand imbalance that could foster further price appreciation," this week's Bitfinex report said.
The analysts tempered their forecast by noting the digital asset must also navigate the turmoil in the Middle East and beyond. "In this risky geopoltical situation, the market's response will provide critical insights into the long-term viability and valuation of bitcoin as digital gold," they said.
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The Bitfinex Alpha report noted that the large amounts of buying from spot bitcoin ETFs, which have been the dominant narrative for the year so far, could still subside.
"Indeed, outflows from ETFs have been seen in the past week, which suggests that ETF demand may begin to stabilize," the report said.
Altcoin and memecoin short squeeze
QCP Capital analysts forecast an altcoin and memecoin short squeeze in the short term.
"This is because altcoins and memecoins have seen persistent negative funding, with some as deep as -100%," the QCP report said.
According to Coingecko data, the memecoin market cap is $55.7 billion, a 1% uptick in the past 24 hours.
However, top memecoins, such as dogecoin, shiba inu and dogwifhat, decreased by 1.6%, 2.6% and 2.1%, respectively, in the past 24 hours.
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