Bitcoin's Halving Impact Wanes as Macro Factors Dominate

Bitcoin's latest price was $85107.67, down 0.01% in the last 24 hours. Bitcoin’s transition towards becoming a traditional asset signifies a notable shift in market dynamics, reflecting broader economic influences. With the diminishing impact of its historical halving cycles, Bitcoin increasingly tracks macroeconomic indicators, particularly inflation rates. Bitcoin is evolving from a speculative asset to one that mirrors institutional economic behaviors.

Each halving cycle once promised monumental gains, but these returns are noticeably waning. The first halving delivered an astonishing 6,400% return, while subsequent halvings saw diminishing returns: the second halving yielded a reduced 3,200%, and the third provided a mere 1,200%. Currently, the ongoing cycle has barely surpassed 100% — even amidst Bitcoin reaching new all-time highs. This trend highlights a significant shift; Bitcoin’s post-halving rallies are not generating the excitement they once did. The data reveals that Bitcoin’s response to its halving is weakening, suggesting the market’s mood is shifting away from a simplistic view based solely on supply shocks. With increasing institutional investment and a complex macroeconomic environment, Bitcoin is starting to behave less like a volatile, speculative asset and more like a stable, macro-aware financial instrument. While the halving still plays a role in moderating supply, it is no longer the dominant factor influencing Bitcoin’s value. Today, Bitcoin’s value is increasingly associated with liquidity cycles and broader economic signals, marking a critical transition in its market behavior.

Shifting focus from halving dynamics, Bitcoin’s current valuation seems to resonate more with inflation expectations. Recent data shows Bitcoin’s price closely mirrors 5-year and 10-year breakeven inflation rates — key indicators of anticipated inflation based on the tug-of-war between nominal Treasuries and Treasury Inflation-Protected Securities (TIPS). When breakeven inflation rates rise, it signals higher expected inflation and drives investors toward alternatives to fiat money, thereby enhancing Bitcoin’s allure as a hedge. Historically, Bitcoin has appeared disconnected from macroeconomic concerns. However, since 2020, its price has become closely linked to inflation forecasts, suggesting a maturation of the asset that is reacting more to Federal Reserve communications than to traditional mining cycles.

Originally conceived as a counter to failures within traditional finance and runaway inflation risk, Bitcoin’s current behavior reflects its adaptation to prevailing economic forces. In 2025, it seems that Bitcoin is increasingly influenced by the same elements it was designed to withstand: Federal Reserve policies, liquidity cycles, and real interest rates. This isn’t inherently contradictory. With heightened institutional adoption, Bitcoin’s market dynamics have evolved to resonate with policy shifts rather than being guided solely by mining metrics or consumer price index adjustments. As interest rates rise, available capital decreases; non-aggressive monetary policy can therefore reignite investor interest in Bitcoin. Such developments indicate a more responsive and interconnected structure. However, this evolution generates complex considerations. Can Bitcoin truly maintain its identity as “digital gold” if its value is influenced by the same macroeconomic pressures affecting traditional equities? Or has it transitioned into a liquidity-sensitive asset — one that thrives in capital-rich environments yet recedes when liquidity tightens? While its fundamental nature remains intact, the shift in its trading environment and pricing mechanisms indicates that Bitcoin has not only matured but also adapted to a more sophisticated economic landscape. Its role as a hedge has evolved; it is no longer merely a fringe asset but now listens closely to the Federal Reserve’s policies.

Bitcoin long-term holders (LTH) activity, which could prove significantly positive for the broader BTC market. Using on-chain data from CryptoQuant, the renowned analyst reports that selling pressure by long-term holders, i.e. amount of LTH holdings on exchanges, has now hit its lowest point at 1.1% over the past year. This development indicates that Bitcoin LTH are now opting to hold on to their assets rather than take profits. A further decline in these LTH exchange holdings to 1.0% would signal the total absence of selling pressure. Notably, this development could encourage new market entry and sustained accumulation, creating a strong bullish momentum in the BTC market. Importantly, Alder highlights that the majority of the Bitcoin LTH entered the market at an average price of $25,000. Since then, CryptoQuant has recorded the highest LTH selling pressure of 5.6% at $50,000 in early 2024 and 3.8% at $97,000 in early 2025. According to Adler, these two instances likely represent the primary profit-taking phases for long-term holders who intended to exit the market. Therefore, a resurgence in selling pressure from this cohort of BTC investors is unlikely in the short-term, which supports a building bullish case as long-term holders currently control 77.5% of Bitcoin in circulation.

Over the past trading week, Bitcoin failed to make any significant price breakout, experiencing rejections at the $86,000 price region. While the market suffered no major price pullback, the high level of sideways price movement indicates a strong investor uncertainty. Interestingly, popular market analyst with X username Daan Crypto has provided an insightful technical analysis on the BTC market, highlighting the present barriers that are restricting an upward price movement. Since hitting a new all-time high in late January, Bitcoin has slipped into heavy correction, losing over 22% of its market price. The majority of the price loss has been linked to international trade tariff crises, which have forced investors to seek relief in less risky assets. However, a pause in new tariffs and an onset in global negotiations soon accompanied a price rebound seen in early April. Albeit, Bitcoin is now struggling to break out of the $84,000-$86,000, forming a tight consolidation range. In performing a technical analysis on the current BTC market, Daan Crypto has identified the three resistance factors that have been active in the specified price zone. The first price opposition is a diagonal downtrend line formed by Bitcoin’s consistent lower lows and lower highs amidst the price correction in the past three months. To establish any intent of a trend reversal, Bitcoin bulls must force a convincing price breakout above this long-standing diagonal resistance. Other critical indicators are the 200-day Exponential Moving Average (EMA) and 200-day Simple Moving Average (MA), both of which provide an average of the past 200 days’ prices, with the EMA giving more weight to recent prices. The 200-day EMA is important in spotting medium-to-long-term trend changes as it reacts faster to any price change than the 200-day MA, which is a classic long-term indicator. However, Bitcoin must move above both indicators to break out of its consolidation and perhaps experience a full price recovery. Despite Bitcoin’s struggles in the $84,000-$86,000 price zone, Daan Crypto has warned that the asset’s ultimate test of a price reversal is at the $90,000-$91,000 price range, which served as a key support in the earlier phase of the bull cycle. A successful reclaim of this range would place Bitcoin back into the bullish trading zone, signaling a potential resumption of the broader bull market.