Binance’s CZ Predicts Bullish Bitcoin for 2024
Changpeng Zhao (CZ), the CEO of Binance, shares insights drawn from his observations of the three previous Bitcoin halvings.
As a Bitcoin halving approaches, CZ observes a surge in discussions, news coverage, and overall enthusiasm within the cryptocurrency community. This period is marked by heightened anticipation, speculation, and a positive sentiment among Bitcoin enthusiasts. He underscores that the halving event is often viewed as a pivotal moment that could shape the cryptocurrency’s trajectory.
Contrary to some expectations, CZ points out that the Bitcoin price does not typically experience an immediate twofold increase overnight following the halving. This can lead to questions and confusion among those anticipating a sudden surge. It’s essential to understand that the effects of a halving event may take time to manifest in the market.
Historically, in the year following a Bitcoin halving, the cryptocurrency has achieved numerous all-time highs (ATHs) in terms of its price. This trend often prompts reflection from individuals wondering about the reasons behind the upsurge. CZ emphasizes that people tend to have short memories and may not readily link the price spikes to the halving event.
Interestingly, the year following a Bitcoin halving often unfolds a different narrative — a sequence of All-Time Highs (ATH) in Bitcoin’s price. The community, still recalling the initial post-halving stagnation, now contemplates the catalysts driving these bullish trends. Doubts that once existed fade away, replaced by amazement and new questions about the factors fueling the unexpected price surges.
While CZ’s insights offer a captivating glimpse into historical patterns surrounding Bitcoin halvings, he underscores a crucial caveat: past performance does not guarantee future results. In the inherently volatile and uncertain realm of cryptocurrencies, previous trends do not necessarily foreshadow future outcomes.
Supply Held by Long-Term Holders Nears an All-Time High, Supporting CZ’s Views
The metric tracking the supply of BTC held by long-term holders has historically served as a reliable indicator of the overall health of the cryptocurrency market. This measure has consistently exhibited a negative correlation with the long-term price performance of the largest cryptocurrency.
Long-term hodlers, who steadfastly retain their assets, tend to refrain from making any movements during market downturns. Significantly, the most substantial increase in the supply held by long-term holders occurs during severe bear markets. During these periods, investors with unwavering confidence in BTC’s potential are hesitant to part with their holdings. They hold onto their coins, believing that the cryptocurrency market will rebound, yielding a profitable return on investment.
Conversely, during a robust bull market, the increase in BTC’s price encourages long-term holders to become increasingly inclined to sell their assets for a profit. Throughout history, major bull markets have witnessed a notable decline in the supply held by long-term holders. Consequently, these coins transition into the possession of short-term holders, who enter the market in later stages, seeking quick gains.
If historical trends were to repeat themselves, the broader outlook for the cryptocurrency market might involve roughly a one-year period of sideways movement. The Bitcoin halving, scheduled for mid-April 2024, might not have an immediate impact on BTC’s price. Its effects may only become evident in the latter part of 2024 and persist throughout 2025.
This projection aligns with the patterns observed in the chart tracking the supply held by long-term holders. Currently, this indicator is approaching an all-time high. It is expected to take approximately 12 months to shift its trajectory and transition into a distribution phase. Once long-term holders begin selling their holdings after the Bitcoin halving, it could serve as one of the initial signals heralding the onset of a cryptocurrency bull run.
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