Bitcoin Halving Triggers $5B Miner Liquidation, Market Brace for Prolonged Slump

Bitcoin miners are anticipated to liquidate approximately $5 billion worth of Bitcoin within five days of the upcoming halving event. This substantial inventory sell-off is expected to dampen the crypto market and lead to a prolonged period of sideways trading for Bitcoin. The influx of additional supply could result in daily sales of up to $104 million, potentially reversing the supply-demand dynamic that has driven Bitcoin's pre-halving rally.

Bitcoin Halving: Miners Poised to Unleash $5 Billion Liquidation, Triggering Extended Market Lull

A looming threat to the cryptocurrency market has emerged on the horizon as the highly anticipated Bitcoin halving event approaches. According to a comprehensive analysis by 10X Research, Bitcoin miners are poised to unload a substantial $5 billion worth of BTC in the wake of the halving, potentially triggering a six-month period of market stagnation.

Markus Thielen, head of research at 10X Research, has identified this impending liquidation as a major factor likely to shape the market's trajectory in the coming months. In a detailed research note published on April 13, Thielen explained that miners have accumulated significant Bitcoin inventories in anticipation of the halving event, with the largest miner, Marathon, holding a particularly sizable cache.

After the halving, which is scheduled to occur in approximately five days, these miners are expected to begin offloading their BTC reserves to avoid a sharp decline in revenue. Thielen predicts that this selling pressure will likely continue gradually over a four-to-six-month period, exerting downward pressure on the price of Bitcoin and potentially triggering a period of sideways trading.

This surge in supply could have a significant impact on the market, potentially reversing the supply/demand imbalance that has fueled Bitcoin's rally in the lead-up to the halving. Thielen estimates that Marathon alone could sell between 14-15 BTC per day, amounting to a daily liquidation value of up to $104 million. If other miners follow suit, the total daily selloff could escalate significantly, further weighing on the market.

While the halving has historically been associated with price rallies due to the reduction in new Bitcoin supply, Thielen warns that this effect may be delayed this time around. He notes that altcoin markets, which typically experience a surge in activity following the halving, may not see a similar rally until approximately six months later.

Thielen's analysis suggests that the upcoming Bitcoin halving could have a profound impact on the cryptocurrency market, potentially triggering a period of extended stagnation as miners liquidate their BTC holdings. This development highlights the importance of understanding the potential consequences of major market events and the need for investors to adjust their strategies accordingly.