Bitcoin Celebrates Strong Q1 Growth but Faces Volatility as Halving Approaches
Summary:
In Q1, Bitcoin experienced one of its best quarters in three years with a 64% price increase. However, analysts warn this could result in significant volatility due to the upcoming Bitcoin halving. Market conditions indicate strong weekly and monthly closings, hinting at potential price fluctuations. Though the halving event is predicted to trigger further growth in Q2 2024, investor sentiment stays neutral with equal liquidations on both short and long positions. While Bitcoin’s trajectory may change post-Q1, and despite interest and speculation increased by the launching of spot Bitcoin ETFs, experts foresee a potential narrative shift.
Bitcoin has been enjoying one of its most positive quarters in the last three years during Q1, however, experts are cautioning that this could trigger considerable turbulence as the Bitcoin halving approaches. Phoenix Desmond, a reputable cryptocurrency analyst, has advised his 11,700 followers on Twitter to brace for potentially unpredictable pricing fluctuations leading up to the halving event. Bitcoin saw a significant surge of 64% in its price during the first quarter of 2024, marking its third most successful quarter in the past three years, according to data from Kaiko Research. The digital currency kicked off the year at $44,172 and ended the first quarter at a strong $71,255.
Still, Desmond proposes the consistent cycle of high performance in weekly and monthly closings indicates rare market circumstances. He noted that it's unusual to witness such a robust weekly, monthly, and quarterly close over the previous All-Time High (ATH), only to retract sharply. The last two weekly closings, on March 17 and March 31, saw Bitcoin leaping by 6.09%, from $67,234 to $71,333, according to data from Yahoo Finance.
The Bitcoin halving event, set for April 20, is merely 16 days away and is spurring thoughts that it might stimulate more increases in Q2 2024 because of the anticipated reduction in supply. Nevertheless, the general investor sentiment concerning the immediate direction of Bitcoin's price appears to be neutral. In the last 24 hours, short and long positions were almost equally liquidated, at $16.27 million and $16.77 million, respectively, according to data from CoinGlass.
A slight rise of 1.5% in Bitcoin's price to $66,687 would result in approximately $57.08 million being liquidated, while a decrease of 1% to $65,013 would lead to a liquidation of around $35.14 million.
Crypto analyst Rekt Capital speculates that Bitcoin may not maintain its Q1 trajectory. The best it might achieve would be resistance levels that are approximate to Q1's all-time highs. The introduction of spot Bitcoin ETFs on Jan. 11 by some of the world's largest asset management firms has sparked greater interest and speculation about Bitcoin's pricing. However, a potential storyline shift is expected according to Michael van de Poppe, the founder of MN trading consultancy. He shared with his 710,600 followers on Twitter on April 4, a prediction for a surge in a new narrative post the halving event and additions in liquidity due to the launch of Spot ETF, causing a decrease in pre-halving Bitcoin interest and a return to normal price levels.
In other related news, an article from a magazine predicts China could drive the upcoming Bitcoin bull run, with Bitcoin reaching $1M by 2028.
Published At
4/4/2024 8:02:22 AM
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