Bitcoin approaches halving event as analysts speculate on price trends

Bitcoin (BTC) is less than six months away from its next halving event, expected in early April next year, sparking speculation among analysts about its price trend. BTC has risen more than 66% this year to $27,600, marking its first September rally in seven years. According to Cathie Wood's Ark Invest, recent data shows a subtle change in the cryptocurrency's behavior.

In its latest Bitcoin Monthly Report, the asset management company pointed out some noteworthy observations, including that the asset may be in a "cyclical oversold zone." The report mentioned: Bitcoin's realized profit to realized capital ratio closed at 0.02% in September, just above the annual low of 0.01%. This oversold situation has only occurred seven times in Bitcoin's history. Ark's data also showed that Bitcoin is mainly concentrated in the hands of long-term holders. Although the asset's price fell on Monday, some attributed it to the ongoing conflict in the Middle East. Specifically, 76% of the total supply of Bitcoin is currently held by individuals who have not traded for more than 155 days. This may mean a decrease in the active trading availability of Bitcoin.

Blockchain analytics firm Glassnode reported last week that the total amount of long-held or presumed lost Bitcoin hit a five-year high, exceeding 7.9 million BTC.

In the broader financial sector, Bitcoin’s price action appears to be different from that of traditional stock markets, according to Bitfinex analysts.

Bitcoin’s price has recalibrated ahead of the S&P 500’s recovery from its low of 4,200 earlier this month. According to their analysis, the correlation indicator shows that Bitcoin’s correlation with stocks has dropped from 0.8 to -0.5 on August 25, indicating a sharp contrast with the trend of the world’s most important digital asset and traditional stocks. This usually occurs when either asset class suddenly becomes bullish or bearish, or when the price of information in Bitcoin or the US stock market moves faster than the other.