What is the hottest topic in the crypto circle recently? Without a doubt, it's the 'halving market'! Everywhere there are rumors that 'there will definitely be a bull market after the halving' and 'hurry up and fill your positions to wait for a double'. To be honest, every time there is such a rumor, a large number of retail investors rush in like leeks. Today, I will talk to you about the underlying logic of halving and how to operate, so you won't be misled by rumors!
First of all, we need to clarify what halving is. Simply put, halving is the reduction of cryptocurrency block rewards by half. Taking mainstream coins as an example, the reward for mining a block will be reduced by half after a certain period of time. This is because the total supply of cryptocurrency is fixed, and halving can control the issuance speed of the currency to avoid inflation.
So why does halving affect prices? The core logic is the 'supply and demand relationship.' After halving, the issuance of cryptocurrencies will decrease, and if demand remains unchanged, prices will rise. This is why many people believe there will be a bull market after halving. But there is a key premise: demand remains unchanged. If market demand falls, even if the issuance decreases, prices may not necessarily rise.
Looking back at historical halving events, we find a pattern: before halving, the market often speculates in advance, and prices rise; after halving, there may instead be a correction. For example, in the halving of 2020, in the months leading up to the halving, prices rose from a low point to a high point; after halving, prices actually corrected for a while before the bull market started. This is because many people bought in before halving, waiting to cash out after halving, which increased market selling pressure and caused prices to fall.
So, don't think that halving will definitely lead to a bull market; the key is to look at the overall market environment and demand. If the macro economy is good, market funds are abundant, and demand is strong, then halving may become a catalyst for a bull market; if the macro economy is sluggish, market funds are tight, and demand is insufficient, then halving is unlikely to drive prices up.
So how should we operate in the upcoming halving market? Here are three suggestions: First, do not blindly go all in; there is a lot of uncertainty in the halving market, and the risk of going all in is too high. You can first allocate a portion of your funds and observe the market's reaction; Second, choose quality projects and do not speculate on those worthless altcoins. Quality projects have stronger risk resistance, and even if the market corrects, there is a high probability they will rebound; Third, set stop-loss and take-profit levels, which is a principle that must be followed in any investment. Set your take-profit and stop-loss points in advance, and once they are reached, execute decisively without harboring any lucky thoughts.
Lastly, I want to say that halving is just an event; it cannot determine the market trend. What truly decides the market trend are various factors like macroeconomics, market demand, and regulatory policies. We should view the halving market rationally and not be misled by rumors. Proper risk control is the most important thing. If you want to know more details about the halving market and quality project recommendations, follow me@链上标哥 so you won't get lost!
