Double Top Concern in Bitcoin: Halving Effect Weakens as Institutional Demand Increases

Bitcoin (BTC) is forming a potential "double top" formation above $100,000, while investors are adopting a cautious stance. According to Katalin Tischhauser, Head of Investment Research at Sygnum, this technical appearance should be observed carefully. However, she emphasizes that a sharp decline like in 2022 is not expected unless a major "black swan" event occurs.

Tischhauser states that crypto markets move largely on sentiment and that fundamental valuation cannot be clearly framed. This increases the importance of formations in technical analysis, especially structures like double tops. Bitcoin, which has been fluctuating between $100,000 and $110,000 for the last 50 days, seems to have lost its upward momentum.

According to some technical analysts, if the price falls from $110,000 and dips below $75,000, there could be a potential pullback to $27,000. This would mean a 75% drop from peak levels. However, experts express that it is unlikely for such a scenario to occur solely based on technical formations.

Tischhauser:

"Crypto markets are sentiment-driven. Unless a major crisis like FTX or Terra occurs, the likelihood of a deep collapse is low. With the current regulatory and political support, a sustained upward trend may be possible."

The Influence of Institutional Investors is Increasing

According to analysts, this time the driving force behind the market's rise is the growing interest of institutional investors, unlike previous narrative-driven rallies. Since the beginning of 2024, there have been net inflows of over $48 billion into Bitcoin ETFs traded only on Nasdaq.

On the other hand, Bitcoin is now finding a place not only in individual investors' portfolios but also in the balance sheets of corporate companies. It is reported that a total of 841,693 BTC is held by 141 publicly traded companies. This creates structural demand in the market.

Tischhauser:

"Institutions are carefully evaluating Bitcoin and adding it to their portfolios, often holding it for the long term. This may provide support for prices for a certain period."

The Halving Cycle May Not Work Like Before

The "halving" event that occurs every four years for Bitcoin, which previously led to significant price increases, may have a more limited effect after the last halving in 2024. The reason is that the market dynamics are now different.

Today, institutional demands play a more decisive role in price movements. Miners' sales constitute only a small part of trading volume.

Tischhauser:

"The market is now being directed more by institutional dynamics than by miner movements. This weakens the traditional halving effect. As long as selling pressure remains low, the impact of supply disruption on the market may be limited."

Pay Attention to External Factors as Much as Technical Indicators

Analysts remind that major price drops in the past have often been triggered by external factors such as political crises, regulatory pressures, or market shocks. Therefore, while technical indicators are important, it is noted that investors should also carefully monitor external developments.

As a result, Bitcoin's price movements are currently shaped by institutional demand and off-market conditions. While traditional cycles give way to a new market structure, it is emphasized that investors should consider not only technical but also macro developments when formulating strategies.


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