Bitcoin is now facing a strong wave of selling pressure, extending its multi-day slide driven by a flight from risk and visible outflows from spot exchange-traded funds (ETFs).
Market sentiment has decisively turned grim, with the Crypto Fear & Greed Index sinking to 29 ("Fear"), signaling a climate of widespread investor unease.
This pressure stems from a potent mix of headwinds, including mounting concerns over the Federal Reserve's (Fed) monetary stance, a sharp unwind of leveraged long positions (over $1.7 billion liquidated in a single day), and BTC's persistent correlation with the tech stock rout, as demonstrated by bellwethers like Microsoft.
Yet, despite the short-term volatility, the long-term investment thesis for the crypto remains bullish, anchored by its programmed scarcity and institutional adoption. Central to this is the post-halving supply shock, a built-in protocol mechanism that has historically preceded its most explosive rallies. At its core, the phenomenon hinges on a scheduled economic crash: the token enforces a drastic and predictable cut in new supply (emission). When such a scarcity meets persistent or rising demand, it creates a fundamental and powerful market imbalance.
Let's unearth how it works: every four years (or every 210,000 blocks), Bitcoin's code executes a halving, slashing the reward for miners by 50%. The most recent one, which took place in April 2024, reduced the reward from 6.25 to 3.125 BTC per block. This means that the number of new tokens entering the market each day has been cut in half.
Thus, there is an immediate, protocol-enforced supply crunch. Daily issuance is literally slashed by 50% overnight. If demand—supercharged this cycle by institutional ETF inflows—remains steady or grows, a structural shortage will inevitably emerge. Buyers have to absorb the same or greater demand with only half as many new coins available.
This is not mere theory; it's a proven pattern. Following each of the previous three halvings, Bitcoin entered a sustained, parabolic bull run within 6 to 12 months as markets gradually priced in the new, scarcer reality.
The ultimate recommendation is to buy Bitcoin from the $72,800 support. Place Take Profit at $108,000. Set Stop Loss $65,000.
Calculate your open position so that a potential loss (protected by a Stop Loss order) is limited to 1% of your deposit. If your account balance does not allow entering a position of this size, it is better to skip the trade and wait for other market signals that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
