To The Moon

We are less than 3 days until the most important and anticipated event in the cryptocurrency sector: Bitcoin's halving. This event is expected to have a major impact on the sector due to recent developments surrounding the leading digital asset. Some of these developments include the emergence of spot Bitcoin exchange-traded funds (ETFs) and the evolving regulations for digital assets.

I think we need to understand what are the key metrics to monitor ahead of the halving include on-chain activity, exchange withdrawals, and ETF inflows. Bitcoin miners are expected to adapt to post-halving challenges by upgrading equipment and diversifying revenue streams.

Bitcoin On-Chain Volume (7 Day Moving Average)

As we can see that when $CME Bitcoin - main 2404(BTCmain)$ price make the retreat, we see that the 7 day MA show Bitcoin on-chain volume is also trending down. So it is important for us to monitor this on-chain volume, and if the volume picked up.

We should see Bitcoin coming back up. I personally feel that 17 and 18 April 2024 bitcoin transaction volume would be key. Inflows from ETFs will be next.

Bitcoin Miner Revenue

Another area we need to look at is the bitcoin miner revenue, we can see that it is near its low since Bitcoin make its retreat, so what would halving do to these bitcoin miners remain to be seen.

One thing we need to understand is the hash rate, over the last few months, there have been report of miners increasing the hash rate. But how is the hash rate correlate with Bitcoin prices coming up?

Bitcoin Hashrate Correlation With BTC Price

If we look at the Bitcoin hashrate price, it is dropping recently, but compared to the BTC price move, we could see that it is actually in an upwards move.

This could mean that miners increasing their hashrate might not be a good time after all. According to a report by Coindesk, analysts predict a modest decrease of between 5% and 10% in Bitcoin mining hashrate after the halving event.

This is attributed to the current high profitability in mining and the rapid adoption of efficient mining equipment. Despite this short-term dips, the hashrate is expected to swiftly rebound, reflecting the resilience of the industry.

Miners using high-cost equipment are under pressure to upgrade to more efficient models to maintain profitability. The introduction of newer and more energy-efficient machines will necessitate a shift in strategy. Thus, it is important for miners to adapt to the evolving market dynamics.

I personally would look out at these miners: $CleanSpark, Inc.(CLSK)$ $Marathon Digital Holdings Inc(MARA)$ $Riot Platforms(RIOT)$

There are already report of some miners planning to diversify into other sectors, this actually reflect how competitive the nature of the crypto mining industry is. Moreover, there is a trend towards geographical decentralization, with miners exploring new, cost-efficient locations for mining operations. T

So we should assess and look at the impact of the Bitcoin halving is beyond price movements, transaction volumes, market sentiment, and investment trends.

How Mining Sector Preparing for the 2024 Halving

There are both opportunities and challenges to crypto exchanges. The reduced supply of new Bitcoins could result in increased demand for crypto assets and lead to bullish sentiment and price volatility.

However, crypto exchanges must ensure sufficient liquidity to accommodate heightened trading activity, optimize trading algorithms, and keep users informed about market disruptions.

I feel that as investors as 2024 halving approaches, we should monitor important metrics such as on-chain activity, exchange withdrawals and deposits, and ETF inflows. These indicators would help to provide insights into market sentiment and the trajectory of Bitcoin's price movements.

Bitcoin ASIC Price Index Converging

As we can see that halving get closer, the ASC price getting converge, this might not be a bad idea, considering that miners' shares have lagged as bitcoin outperformance has sucked retail liquidity from mining stocks,

Bitcoin (BTC) miners may have underperformed the cryptocurrency this year, but their CEOs remain upbeat as the reward halving approaches, broker Bernstein said in a research report on Monday.

"Retail liquidity" from mining stocks

If we looked at the reason why miner stocks have underperformed, it is caused by strong moves in spot bitcoin and exchange-traded funds (ETFs), which have sucked "retail liquidity" from mining stocks.

And concerns about the impact of the halving on miner revenues added to the underperformance reason. This quadrennial halving is when miner rewards are reduced, slowing the rate of growth in bitcoin supply. The next halving is due around April 19-20.

But as Bernstein reported that their interview with CEOs of Riot Platforms (RIOT), CleanSpark (CLSK), Marathon Digital (MARA), Cipher Mining (CIFR) and $Hut 8 Mining Corp(HUT)$ came tp a common acknowledgement that these companies are in a relatively comfortable financial position this cycle and so are better prepared to withstand the impact of the halving

These miners miner dollar revenues are at all-time highs and they are relatively low debt on the balance sheet. These factors provide a solid cushion to miners pre-halving.

The report also highlighted some CEOs on the view of potential for miner consolidation, the industry might consolidate to leading miners and believes RIOT, MARA, CLSK and CIFR to be in the lead.

This time round we need to note a significant change which is the application and layer 2 development on the Bitcoin blockchain, which has led to an increase in network fees that flow back to miners as incremental revenue streams.

Summary

While there are key metrics we need to monitor ahead of halving, what is important as investors would be to look at the price action and overall economic environment. There might a chance that we could see M&A faster in the crypto mining industry.

This shall be a game on who has prepared and remain strong, will withstand any impact and challenges coming from the halving.

It is important for us to identify and follow our own strategy in time like this, ask ourselves, what do we want and how to trade?

Appreciate if you could share your thoughts in the comment section whether you think Bitcoin hashrate and on-chain data would be key metrics we need to consider?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.