Bitcoin’s new halving period kicks off with a strong start as the price approaches $70,000, bringing bulls one step closer.
The price of Bitcoin may be regaining momentum following the productive “halving” event, marking a new phase or era in the cryptocurrency’s development.
After a turbulent week where Bitcoin dipped to its lowest point in six weeks, traders have been severely challenged. But is the market’s downward trend coming to an end?
Analysts are considering some commonly used factors in the Bitcoin market. Historically, Bitcoin’s price has experienced declines followed by significant recoveries. However, these price shifts typically unfold over an extended period of time, often spanning several months rather than days or weeks.
During this current cycle, there have been several firsts worth mentioning. Most significantly, the price of Bitcoin reached a new record high against the US dollar just prior to the halving event occurring.
In 2024, anything might become a reality as miners adapt to the changing circumstances and Bitcoin deals with a complex geopolitical and economic environment.
In simpler terms, CryptoMoon examines the important matters that Bitcoin investors should be aware of in the upcoming week based on potential price drivers for Bitcoin.
Liquidity keeps lid on Bitcoin’s post-halving rebound
Following a quiet end to the week, Bitcoin’s value against the US Dollar surged past $66,000 for the first time since April 15.
According to CryptoMoon Markets Pro and TradingView, the cryptocurrency pair hovers around $66,000 at present, attracting significant attention from traders in anticipation of the upcoming Wall Street opening next week.
Last week was characterized by selling during United States trading hours.
According to Keith Alan, the co-founder of trading resource Material Indicators, there was a significant amount of ask bids sitting just above the current market price in the order book that caught his attention.
It appears that placing a large order to buy Bitcoin (BTC) could have been intended to thwart a “Green Candle” (bullish) closing price. This was proposed in a message on platform X, previously known as Twitter.
“I’m speculating about the possibility that one of THE 10 #BTCETF institutions put that up to keep price from running back to the $70k range before TradFi markets open and they have a chance to buy a dip.”
Alan noted that this liquidity was not supplied while Wall Street was absent.
He explained that they might have held off dumping it over the weekend because there was nothing in it for them if they couldn’t make a purchase at that time.
“Expecting some volatility on Monday.”
At present, according to the most recent information from monitoring tool CoinGlass, Bitcoin is consuming a portion of the available liquidity, and the largest concentration lies at the price level of $66,600.
According to CoinGlass data, even though Bitcoin’s price reached new weekly highs, only a small amount of short positions, valued at around $17 million, were liquidated in the last 24 hours.
Moving forward, well-known trader Skew expressed that the week’s closing price of $65,000 was “quite satisfactory.”
In his most recent Bitcoin update, he mentioned that the trends established during the first part of the week would carry significant implications for risks and Bitcoin.
“$65K – $66K area has been relatively sticky for HTF trend. 4H trend will lead into higher timeframe confirmations I think today, so that’s essentially what I am focused on.”
Analysis eyes BTC price range before “parabolic upside”
After the recent reduction in Bitcoin’s block reward subsidies, market players ponder the potential impact on the cryptocurrency and if this event could establish a new trend versus past occurrences.
Chief among them is popular trader and analyst Rekt Capital.
Over the past few months, researchers have identified patterns in the price behavior of Bitcoin during its previous two halving events.
According to CryptoMoon’s latest update, Bitcoin has followed these trends so far in 2021, albeit with some exceptions. Notably, it reached a new peak price before the halving event took place, instead of after.
At present, Rekt Capital believes that Bitcoin’s price relative to the US dollar is entering a “phase of collecting themselves,” which involves stabilizing near the level of the last block reward halving.
He now believes that the current price range, which has caused recent hesitance, could instead serve as a strong foundation for future growth and substantial returns.
“Is it possible that Bitcoin’s price has already reached the highest and lowest points within its Post-Halving Re-Accumulation Phase?” he asked on April 21.
“Then the prices within this range would be the best we will be able to get before Bitcoin is finally ready Post-Halving Parabolic Upside.”
An earlier post provided more evidence for this belief. With its recent price drop offering a potential buying chance, Bitcoin is expected to do so again while remaining inside its present price range during the next few weeks.
In simpler terms, Rekt Capital stated that every decrease in Bitcoin’s price before the halving event presented a good buying opportunity.
“Going forward, this upcoming several week consolidation will represent a bargain-buying opportunity.”
PCE week greets a hawkish Fed
This week, we have an additional factor contributing to the market’s instability with the arrival of regular U.S. economic reports.
The first quarter Gross Domestic Product (GDP) and jobless claims will be released successively, with the much-awaited March Personal Consumption Expenditures (PCE) Index following suit on April 26.
The Fed’s favored inflation indicator is the last one mentioned, so it’s essential to keep an eye on it since economic policies could swing between tightening and easing based on its readings.
Investors in risky assets are keeping a close eye out for signals indicating that interest rates may decrease earlier than anticipated. However, Federal Reserve officials have been advocating for a “higher and longer” interest rate policy.
Central banks in Europe and the UK are considering lowering interest rates before the Federal Reserve does.
“Might the latest PCE inflation figures reveal a further rise in inflation, according to The Kobeissi Letter’s analysis in the X thread on this week’s significant economic developments?”
“All eyes will be on PCE inflation data this week, the Fed’s preferred inflation metric.”
Kobeissi pointed out that there’s been a significant decrease in positive feelings towards investing in American stocks. As evidence, he cited the Fear & Greed Index, which has switched from “greed” to “extreme fear” mode in just a few days.
Bitcoin’s correlation to equities could thus return as a topic of conversation.
Bitcoin transaction fees: “Higher for longer?”
Since the Bitcoin halving, news outlets have criticized the network for having unusually high transaction fees, with one peak reaching nearly $200.
Due to the Runes event causing an increase in rewards, Bitcoin miners have experienced profitable earnings even with the decrease in block subsidy by half.
According to Charles Edwards, founder of Capriole Investments, which specializes in quantitative Bitcoin and digital assets, the recent change in Bitcoin’s production rate marks a significant transformation for the cryptocurrency as a whole when considering its current state.
“Welcome to a new paradigm,” he summarized on X on April 22.
Edwards points out that the actual electrical cost for mining a single Bitcoin block has surpassed its current market value, which is above $77,000.
“The price of a Bitcoin miner reached an astonishing $244,000 on Saturday. This figure represents the reward plus fees for mining a single Bitcoin. The increase occurred due to escalating transaction fees, which surpassed $230 – approximately four times the previous all-time high of $68 set in 2021.”
“This means Bitcoin is trading at a DEEP DISCOUNT.”
Edwards points out that it’s unusual for the Bitcoin-USD exchange rate to fall below its production cost. Such situations are short-lived as they’re typically corrected by rising Bitcoin prices, unprofitable miners ceasing operations, and transaction fees staying elevated.
“Expecting a bit of all three,” he forecast.
“Bitcoin’s days under $100K are numbered.”
Crypto “greed” returns after open interest wipeout
While stocks enter a period of cold feet, crypto sentiment has gone the opposite way.
The Crypto Fear & Greed Index, which mirrors the sentiment of the stock market but for cryptocurrencies, is currently at a level of 73 out of 100, indicating it’s not quite in the “extreme greed” territory yet.
Approximately a week ago, on April 18th, the Index reading stood at 57 out of 100. This number signifies that avarice had mostly disappeared from investors’ considerations.
The drop in BTC pricing was joined by a readjustment on exchanges, marked by significant decreases in funding rates and open interest levels.
According to financial commentator Tedtalksmacro, written on April 22, the current situation could lead to significant results that might facilitate a larger market recovery.
“The market has gifted us with a beautiful reset in trader positioning for Bitcoin,” he predicted.
“OI weighted funding turned negative for the first time since October 2023… That was before Bitcoin ran from 27k to 46k without any meaningful dip.”
A chart that goes along with this text illustrates the significant transformation in the bitcoin market landscape since it reached its peak price of $73,800 around mid-March.
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2024-04-22 12:37