Insights from Traders on Bitcoin’s Halving

Bitcoin experienced a significant drop last week, falling from $69,000 to $60,800, a decline of about 18% from its all-time high of $73,800 earlier this month. This decline was partially influenced by the outflows from the 11 new Bitcoin-exchange-traded funds (ETFs). These funds saw $836 million in funding leaving between March 18-21, according to data from Farside Investors. This raises the question of whether new investors are becoming hesitant and how likely they are to continue holding Bitcoin if the downward trend persists. This is also the first time Bitcoin has hit a new all-time high before its upcoming halving in April.

To gain some insight into the current market and for trading tips, we turned to three investors. Lucas Kiely, Chief Investment Officer for Yield App, explains that since the launch of the ETFs, Bitcoin has been reacting to movements in the equity markets. He highlights specific moments in the day when liquidity increases and price action becomes more predictable. By taking advantage of these golden hours, Kiely has been able to capture significant BTC moves and generate profits. His secret lies in a lightning-fast momentum strategy where he buys weakness, sells strength, and maintains tight stops. This approach has allowed him to outperform Bitcoin by 10% this month.

Michael van de Poppe, CEO and founder of MN Trading Consultancy, suggests that the recent decline in ETF investment may be linked to the Federal Reserve (FOMC) meeting, as markets and institutions tend to be more risk-averse before these meetings. The Bank of Japan’s decision to increase interest rates has negatively impacted risk-on markets. Van de Poppe believes that these events should not have a long-term impact on the markets. He advises investors to buy Bitcoin dips when the price is relatively low, using any corrections of 15-40% to accumulate for the next bullish cycle.

Chris Newhouse, a DeFi analyst at Cumberland Labs, emphasizes that people are aware of the volatility of digital assets due to past headlines. Those buying into ETFs are seeking exposure to this asset class. New buyers should be aware of the difference between buying based on FOMO and long-term demand. Understanding that volatility will persist in the short term, investors need to determine whether they are trading the volatility or investing in the long-term narrative. For those focused on trading, timing and momentum are crucial, whereas dollar-cost averaging is recommended for long-term investors.

Newhouse has been actively placing “stink bids” during periods of price action where dips are quickly filled. Given the historical activity around the halving, the growing institutional demand, and the retail demand for meme coins, he believes there is a constant demand across all tokens. The market is currently in a buy-the-dip mode, and it would take significant headwinds for a larger pullback to occur.