A cryptocurrency analyst shared his views on how the Bitcoin halving in 2024 could affect the price of BTC.
Analyst Ali Martinez shared a post on Twitter explaining how the fee-reward ratio and historical accumulation/distribution cycles can provide clues about the future trajectory of the Bitcoin price.
The fee-reward ratio is an important indicator of the financial sustainability of the Bitcoin network. It measures the ratio of transaction fees to the block rewards miners receive for securing the network. As block rewards dwindle due to halving events, transaction fees become a vital source of income for miners.
Ali Martinez Argues Wage-Reward Ratio Indicates Potential Rally Before Halving By 2024
Martinez argues that a higher rate indicates a healthy and sustainable network, increases investor confidence and demand, and pushes the price of Bitcoin up. Conversely, a lower rate could negatively impact the Bitcoin price, raising concerns about long-term sustainability.
According to Martinez, the current increase in the wage-reward ratio indicates that the market is entering another accumulation cycle similar to 2019 and 2020.
According to the analyst, this indicates a potential price rally until the 2024 Bitcoin halving, which will reduce block rewards from 6.25 bitcoins per block to 3,125 bitcoins.
However, Martinez cautioned that other factors such as market sentiment, macroeconomic conditions and regulatory developments also play an important role in determining the price of Bitcoin.
Martinez said that the 2024 halving will be an event that should be watched closely as it could have a significant impact on Bitcoin's supply and demand dynamics.
*Not investment advice.