Halving event means lesser BTC rewards for miners, and what does that mean?
It means that miners will also mine lesser bitcoin since their reward has been slashed in halves. When miners mine less bitcoin, that means, less bitcoin in the market and that equally means the lesser the bitcoin the higher the competition for the remaining Bitcoins left.
Does this have something to do with supply and demand? The Bitcoin in the market does not become lesser when Bitcoin halves, since the Bitcoin in the market circulation is already mined and has nothing to do with the halving event. What becomes less is the incoming supply since the block reward halves, the incoming supply mined by the miners also halves. The Bitcoin circulating in the market does not become less it even becomes more when newly mined Bitcoin is delivered to the market. It is the incoming supply that becomes less when there is a Bitcoin halving and not the Bitcoin that is already in the market.
This is exactly where the High fees comes in because the more users are competing for the remaining Bitcoins, that means more transactions in the Chain, we already know the law of scarcity, demand and supply.
The high fee does not come from users who are competing for the remaining Bitcoins but rather for the user who are competing to be the first one to get confirmed. If we are talking about the competition or the remaining Bitcoin, for the block reward to be specific, it has something to do with the hashrate not the transaction fee. Besides the current increase in transaction fee has nothing to do with Bitcoin halving, because the reason why the current transaction fee spike is due to the launch of Rune Protocol which actually has nothing to do with Bitcoin.
The more a product's supply drops, the product becomes scarce and the demand increases and that means the price also increases.
For Bitcoin holders, an increase in price is not a negative effect, instead holders would love to see their portfolio increasing in price. So this effect is considered positive by those who own Bitcoin.
It's just like bidding in an auction, the more the competition, the higher the price gets. It's simple as that.
I think it is more appropriate to say that the higher the demand than the supply, the higher the price.