Bitcoin Experiences Sharp Decline Following Fourth Halving, Defying Market Expectations
Summary:
Bitcoin's value has sharply decreased by 11% since its fourth halving on April 20, surprising those who anticipated a surge. Despite a brief rally immediately after the halving, Bitcoin's value dropped below $57,000 by May 1. The distinct characteristics of this cycle, such as an extraordinary bull run preceding the halving, have led to discrepancies in market predictions. Some analysts forecast further potential decreases tied to slower inflows into Bitcoin exchange-traded funds. However, multiple factors could contribute to Bitcoin's potential to hit new highs in 2024.
Bitcoin's value has been experiencing a sharp downfall in recent days, shocking those who predicted that Bitcoin would rise following its fourth halving event. Since the fourth halving happened on April 20, Bitcoin's price has seen an 11% decrease. As of the halving date, Bitcoin's trading price hovered around $64,000, climbing above $67,000 briefly after the halving on April 22. But since this temporary escalation, Bitcoin's value has been steadily lessening, falling below $57,000 on May 1, based on data from CoinGecko. Currently, Bitcoin's trading price sits at $57,362, a 7% decrease within the past 24 hours, and more than a 17% drop in the past 30 days.
The precipitous drop in Bitcoin's value after the halving has caught some by surprise, given the pattern of previous halving events where Bitcoin often rose after halving. History shows that Bitcoin usually experienced a rally post-halving, typically observed a year or more after the event. For instance, following the 2016 halving, Bitcoin soared by approximately 3,000% in 17 months, hitting a pivotal $20,000 in December 2017.
This current cycle, however, has deviated significantly from past cycles in terms of Bitcoin halving traits. One such divergence is Bitcoin's exceptional bull run before the fourth halving, reaching an unprecedented high just before the halving took place, a phenomena never before witnessed in Bitcoin's lifespan.
Mati Greenspan, founder of Quantum Economics, commented on the distinctive nature of this recent Bitcoin halving, acknowledging the significant bull run and price movement prior to it. Notwithstanding the recent drawbacks, Bitcoin has still risen by 35% since the year's start. Greenspan remarked that Bitcoin's current price development was somewhat anticipated due to the current economic climate and the stock market decline.
Earlier forecasts by crypto authorities forecasted that Bitcoin would depreciate following the fourth halving. In March 2024, JPMorgan's Bitcoin analysts projected that Bitcoin could plunge toward $42,000 post-halving. Markus Thielen, 10x Research CEO and chief analyst, stated that Bitcoin could possibly drop to $52,000 after the halving. Thielen proposed that the key propellant for the recent Bitcoin rally was the influx of funds into Bitcoin exchange-traded funds, which has starkly diminished in the past month.
Investment researcher Lyn Alden and other analysts believe there are many factors, apart from the halving and U.S. Bitcoin ETFs, that could push Bitcoin to new peaks in 2024.
Published At
5/1/2024 1:57:23 PM
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