Why did Bitcoin plummet after the halving?

Bitcoin halving usually leads to a plunge due to: 1. The bursting of speculative bubbles caused by excessive market expectations; 2. The reduction in the supply of new coins leads to the imbalance of supply and demand; 3. The psychological reaction of investors; 4. Technical factors The superimposed impact; 5. The impact of overall market conditions.

The reason why Bitcoin halving caused the plunge

Bitcoin halving refers to an event in which the amount of Bitcoin rewards is halved. , usually occurs every four years. Over time, Bitcoin block rewards will gradually decrease until they are finally distributed.

The collapse of Bitcoin halving is mainly caused by the following reasons:

1. Market expectations are too high

The market creates a speculative bubble that leads to artificially high prices. When the halving occurs, many investors decide to sell their assets and take profits. This resulted in a sharp drop in prices.

2. Increase in supply

After the halving, the supply of new Bitcoins on the market decreases. This means fewer coins are available for purchase, which increases demand and drives the price higher. However, in the short term, reduced supply may lead to short-term imbalances in the market, resulting in lower prices.

3. Psychological factors

Halving may cause psychological reactions among investors. Some may interpret this as a sign that price gains will slow or even reverse, which could trigger panic selling and cause prices to fall further.

4. Technical factors

The halving may also occur at the same time as other technical factors that put pressure on the price of Bitcoin. For example, a bullish trend may reach its limit and support may be broken, causing a price correction or decline.

5. Market conditions

General market conditions may also affect the price of Bitcoin after halving. For example, if uncertainty or volatility prevails in the economy, investors may be less willing to invest in risky assets such as Bitcoin.

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