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May Trading Report: How Has Bitcoin Halving Impact Markets and Miners?


Following its third halving, Bitcoin miners suffered the full impact of the periodic block reward cut as revenue plunged 48%, according to the latest trading report from Binance Futures.

Key Takeaways:

  • Bitcoin miners suffered a plunge in revenue as block rewards reduced by half. 

  • Bitcoin still generated a positive return for investors in May despite a lull trading range. 

  • Binance Futures reported volume growth for the fourth consecutive month, $137 billion in volume, 37% higher than the previous month. 

  • Post-halving trading volumes declined as Bitcoin prices consolidated in a narrow range.

  • Open interest grew following the halving event suggesting that market participants expected more volatility ahead.

  • Bitcoin breaks above $10,000 for the first time since halving.

Following its third halving, Bitcoin miners suffered the full impact of the periodic block reward cut as revenue plunged 48%. The total value of block subsidies and transaction fees paid to miners plummeted to $8.95 million on May 12 from $17.16 million the previous day.

Chart 1 - Miners’ revenue declined after halving

Over the past year, miners revenue consolidated within the range of  $7.89 million and $28.60 million, with the lowest point reached in March when the price of BTC tanked as much as 27% in a day. Miners’ revenue recovered to its highs just before the halving event but immediately plunged back down as block rewards were reduced by half.

While the fall in mining revenue has caused disruption on mining operations, analysts argued that the recent halving event is a healthy rebalance. They believed that while Bitcoin miners have been affected by the halving, however, the event could drive migration of hash power to rival chains such as Bitcoin Cash (BCH) and produced a positive impact on the entire crypto ecosystem.

Bitcoin performed positively despite a narrow trading range

Bitcoin’s much-anticipated halving event had an oddly muted effect on its price, as prices consolidated within the range of $8,000 to $10,000, a relatively narrow range compared to previous months.

On average, Binance Futures’ perpetual contracts generated positive returns for investors in the month of May. BTCUSDT, its most popular contract, recorded an 11.8% return. Among Altcoin contracts, ADAUSDT recorded the highest gain for the month, delivering a 58% return. 

Other Altcoin contracts such as ETHUSDT, also saw a significant jump in market value, increasing by 16.6% to $240 per contract. In general, most altcoin perpetual contracts displayed a positive performance in May, with the exception of BCHUSDT, XRPUSDT, EOSUSDT & DASHUSDT. Binance Futures added THETAUSDT on May 27th, further expanding its range of products to a total of 25 contracts

Chart 2 - Performances of Binance Futures perpetual contracts in May

While a Bitcoin bullrun is still uncertain, it is important to highlight that it took a few months for prices to break into momentum in its past halving events. Therefore, there is still time for Bitcoin trading to increase in value and reach new yearly highs. In retrospect, this current pullback is almost identical to the 2012 and 2016 halving events, where Bitcoin retraced 1.8 percent and 13.8 percent respectively.

Post-halving volume falters despite growth in monthly volumes 

Binance Futures reported volume growth for the fourth consecutive month, $137 billion in volume, 37% higher than the previous month. The platform displayed a daily average of $4.4 billion in volume while achieving a high of $8.8 billion on May 10th. 

Chart 3 - Daily trading volumes vs. 7-period moving average

As shown in the chart, we observed more active participation prior to halving, however, trading activity has since declined as volumes taper-off towards the end of the month. This underwhelming market participation was clearly shown as daily trading volumes were persistently lower than the 7-period moving average.

Post-halving Open Interest recovered and surpassed previous highs

Just days before Bitcoin’s halving, prices plunged more than 15% in a single day, triggering liquidations across major exchanges. As a result, open interest on Binance Futures BTCUSDT contract fell from $379 mm to $220 mm. 

Chart 4 - Daily open interest in May

Since then, open interest on Binance Futures has recovered back to pre-sell off levels. Total open interest in Binance Futures’ perpetual contracts is at $500 million as of May 31st, indicating more capital in-flows as traders anticipate more volatility ahead.

Chart 5 - Total open interest in BTC Futures across major exchanges

Similarly, open interest across major exchanges has grown gradually post Bitcoin’s third halving despite prices contained in a tight consolidated range. This observation suggests that traders were accumulating positions and anticipating a large move in Bitcoin. 

Chart 6 - BTC perpetual contract open interest dominance

As observed, open interest in BTCUSDT contracts declined from 68% on May 15th to 63% May 24th. Open interest recovered to 70% as Bitcoin prices regained the $9,000 mark. In the last two weeks, open interest in Altcoin contracts have grown significantly as prices broke new highs, drawing significant interests from traders. 

Long/Short ratio peaked days before halving 

Leading up to the halving event, traders on Binance Futures were bullish on Bitcoin. Even as Bitcoin prices plunged more than 15% just 2 day before its halving, investors were not deterred and in fact, added on to their long positions. This was shown by our Long/Short ratio which indicated the number of long positions at its highest on May 10th. However, after the halving, investors’ optimism mellowed as BTC prices consolidated in range, falling short of consensus’ expectations.

Chart 7 - BTC Long/Short ratio vs. Daily price change

Even as prices were bounded in a range, we observed on two occasions where investors accumulated long positions as Bitcoin prices dip. First occasion was when prices dipped to a low of $8,000 and the second, as prices pulled back to $8,500.

Is this the start of a Bitcoin bullrun?

At press time, Bitcoin has just broken above the $10,000 barrier, triggering a broad-based rally across crypto markets. Considering that $10,000 level was a long-standing psychological resistance on Bitcoin, the recent breakout and price surge could indicate a short-squeeze. Any excess demand (to cover shorts or buying on momentum) could push prices even further, given that Bitcoin’s block reward has just been reduced by half.

Major altcoin markets responded to Bitcoin’s surge in similar fashion, with ETH, BCH and LTC breaking new highs. As such, the total cryptocurrency market capitalization is now over $285 billion, with Bitcoin’s share continuing to grow at 65.9%.

Chart 8 - Historical price of Bitcoin (Weekly chart)

Historically, the $10,000 barrier has been a massive psychological anchor for investors as prices have struggled to sustain any prolonged rally above the $10,000 mark. The recent breakout marks a critical milestone for Bitcoin as its much anticipated bull run is within reach. If prices hold firmly above $10,000, indicating more demand and more capital in-flows, a proper Bitcoin bull market might just be on the way.