Fourth Bitcoin Halving Signals Potential for Most Favorable Cycle Amid High Investor Activity
Summary:
The fourth Bitcoin halving on April 20 signals what might be the most favorable Bitcoin cycle so far, with historical chart patterns and spot Bitcoin exchange-traded funds (ETFs) amplifying the optimism. Pre-halving, Bitcoin hit a record high above $73,600, aligning with historical trends of price surges post-halving events. Despite a temporary decline in ETF inflows, the value proposition of Bitcoin seems more potent due to nearly all BTC being mined, increased utility, early investor activity via ETFs, and growing demand for hedges against inflation. With Bitcoin increasingly seen as a safe haven asset, fluctuations in price action could be anticipated post-halving, with potential surges if resistance points are surpassed.
The fourth Bitcoin halving, which took place on April 20, signaled the start of what might be the most optimistic Bitcoin cycle to date. The optimism was fueled by both historical chart patterns and the emergence of spot Bitcoin exchange-traded funds (ETFs). For the first time in the annals of crypto, Bitcoin (BTC) peaked over $73,600 on March 13, preceding the halving event. Historically, halving events have seen Bitcoin's price surge to record highs within 518 to 546 days.
Coupled with institutional investment from ten United States spot Bitcoin ETFs, the pre-halving peak set the stage for a highly favorable environment for Bitcoin, posits Sukhveer Sanghera, the founder and CEO of Earth Wallet. Sanghera explained to Cointelegraph: “The convergence of nearly all BTC being mined, early investor activity via ETFs, growing demand for hedges against inflation, and increased utility contribute to the fundamental aspects of Bitcoin’s value proposition being more potent than ever."
At 9:58 am in UTC, Bitcoin price slipped by 5.6% on the weekly chart to register above $63,600. Though the maiden cryptocurrency rose a mere 2.85% in the past month, it has soared over 50% since the onset of 2024, reveals TradingView data.
Despite long-term bullish expectations, halvings have typically been followed by short-term corrections. The existing downtrend could end if Bitcoin manages to surpass the $65,000 resistance point, suggests Temujin Louie, CEO of Wanchain.
Observing past trends, Louie statement to Cointelegraph noted: “Historically, Bitcoin halvings were trailed by a dip. If the $58,000 support holds, anticipate continued consolidation. However, if BTC surpasses recent highs, look for a sharp escalation to $80,000, $90,000, or even $100,000."
A temporary decline in Bitcoin accumulation in the ten U.S. spot Bitcoin ETFs contributes to the past month's tepid price action, with net inflows transforming into net outflows in the week of the halving. The U.S. spot Bitcoin ETFs recorded $398 million worth of negative net outflows during the halving week, contrasting with over $199 million worth of net positive inflows during the previous week.
Despite this temporary decline, the ten Bitcoin ETFs have collectively gathered over 835,000 BTC worth $53.5 billion, representing 4.24% of the current Bitcoin supply.
Despite this temporary outflow, the narrative around Bitcoin’s price action stays positive, suggesting that new investors prepare to gain BTC exposure, notes Jonas Simanavicius, co-founder and CTO at Syntropy: “Large capital institutions' early adopters have joined the market, and the subsequent institutional wave is preparing their inflows. While large banks foresee some downward movement in BTC post-halving, I perceive strength in BTC due to anticipated new money inflows and its status as a hedge against inflation."
Simanavicius also emphasized that Bitcoin is increasingly seen as a “protection against political tensions” amidst escalating global conflicts, which could solidify its role as a safe-haven asset.
Published At
4/20/2024 1:33:31 PM
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