The price of Bitcoin (BTC) has fallen nearly 12% since reaching an 11 month high on April 14th, to approximately $31068. The trading price of the largest cryptocurrency on Monday was slightly higher than $27500, as market participants still have doubts about its possible trend
The price of Bitcoin (BTC) has fallen nearly 12% since reaching an 11 month high on April 14th, to approximately $31068. The trading price of the largest cryptocurrency on Monday was slightly higher than $27500, as market participants still have doubts about its possible trend.
Setting aside short-term price trends, one analyst believes that Bitcoin's price surge has only just begun and may climb to $50000 in the second quarter of 2024, driven by the four-year halving cycle of the internet.
Since December 31st, the value of Bitcoin has increased by over 70%, erasing all losses caused by the collapse of the FTX exchange in early November. Although bulls and cryptocurrency enthusiasts highly celebrate rising to over $30000, they lack the motivation to sustain the upward trend.
Now, Bitcoin is trying to maintain its support above US $27500. CoinDesk suggests that the decline may be due to the continuous growth of the yield of 10-year US treasury bond bonds by 6 basis points to 3.58%.
Two consecutive weeks of gains may reduce investors' interest in high-risk asset classes such as BTC and other cryptocurrencies. Ethereum also erased all the benefits generated after the upgrade of the Shapella software. After a 12.5% decline within a week, the largest smart contract token trading price on Monday was $1850.
Nevertheless, analysts such as Simon Peters from eToro stated in a report on Monday that despite the decline in Bitcoin prices, "we have not yet seen a steeper level, indicating that the recent uptrend has come to an end," CoinDesk reported.
How far can the next halving cycle drive the price of Bitcoin?
According to Bloomberg Intelligence and Matrixport, the halving event may trigger another 78% increase in Bitcoin.
Halving is an event in the Bitcoin network that occurs every four years, at which time the rewards for mining Bitcoin will be halved. This means that miners can only receive 50% of the rewards they previously received.
The halving of Bitcoin aims to control inflation by limiting the supply of newly issued Bitcoin. This event has been programmed into the Bitcoin protocol and has occurred three times so far, in 2012, 2016, and 2020.
The next halving of Bitcoin is expected to occur in April 2024, which will reduce the reward for mining a block from 6.25 BTC to 3.26 BTC. For every halving event that has occurred so far, the price of Bitcoin has reached a historic high.
According to Jamie Douglas Coutts, an industry research analyst at Bloomberg, the fourth half cycle of Bitcoin has been included by 50%, which means that the largest cryptocurrency can rebound to $50000 by 2024.
The Bitcoin cycle bottomed out around 12 to 18 months before halving, and the structure of this cycle looks similar to the past, although many things have changed - although the internet is much stronger, Bitcoin has never experienced a long-term severe economic contraction, "Coutts said
Although the inflation rate continues to rise, Bitcoin's recent rise since January has been hindered by the Federal Reserve's change in interest rate hikes.
After the collapse of SamBankman Fried's FTX exchange and the banking crisis in the United States, which led to the collapse of three cryptocurrency friendly banks, the pressure on Bitcoin and cryptocurrency also came from a sustained blow to cryptocurrency.
FTX implosion marks the bottom of Bitcoin
If market participants believe that the FTX event marks the bottom of Bitcoin, CCData analyst Jacob Joseph believes, "History shows that we still have about 350 days of 'accumulation' before witnessing a typical halving breakthrough price trend
Coutts, an analyst with Bloomberg Intelligence, is not the only one who predicts that the price of Bitcoin will rise sharply due to the halving event. Markus Thielen, the research director of Matriexport, predicts that BTC will rise to $65632 by April 2021, which is more than twice the current market value.
At the current market level of $27500, the price of Bitcoin has dropped by $41500 from its historical high of nearly $69000 set in November 2021. The previous historical high was set 18 months after the Bitcoin halving event in 2020.
As central banks around the world tightened monetary policies to curb soaring inflation during the pandemic, the cryptocurrency market suffered a heavy blow in 2022. The collapse of TerraUSD in May and the chaotic exit of FTX further suppressed prices, causing huge losses for investors.
Joseph from CCData said, "Bitcoin may once again hit a historic high in the future, but due to the expansion of market size and competition from other digital assets, it is unlikely to experience the same cycle of growth as before
Evaluate Bitcoin price profitability this week
At present, every investor holds a reserved attitude towards every Bitcoin price forecast, which is expected after a recent decline from $31068 after liquidation. In this section, we will examine the short-term prospects of BTC to investigate the next trend that may break through $30000 or fall to $20000.
As shown in the daily chart, Bitcoin prices are firmly above the 50 day moving average (EMA) (red line) of $27309. Interestingly, this is supported by the convergence of moving averages and upward trend lines.
If bulls want to immediately push for a return to an upward trend of over $30000, they must spare no effort to maintain BTC above convergence support.
However, we cannot ignore the selling signal presented by the moving average convergence divergence (MACD) indicator. Please note that the call to sell BTC begins to take effect after the blue MACD line crosses below the red signal line.
If the momentum indicator supports a sustained drop below the moving average of 0.00 and enters the negative zone, Bitcoin prices may engage in a failed battle above the immediate support provided by the 50 day EMA.
BitBullCapital CEO DiPasquale told CoinDesk in an email statement, "A healthy retest of the support area between $25000 and $27000 is a positive signal for continued gains." "As long as Bitcoin manages to stay above $22000, in the worst-case scenario, we can expect more upward actions
DiPasquale's statement suggests that Bitcoin's drop to $22000 is still considered a healthy pullback. But before that, bulls may take chances to rebound from higher levels, such as buyer congestion of $26,00 and a 200 day moving average of $24000.
Micha ë lvandePoppe is one of the most closely watched analysts and traders on Twitter, stating that the possibility of Bitcoin rising to $28800 is higher than the possibility of falling to $25000. In his view, the key level is $27800, and it is expected that Bitcoin prices will attract more liquidity to drive the next step beyond $30000.
Another well-known trader and analyst, Dr. Pulitzer, believes that despite the FTX crash, Bitcoin hit a bottom of $18000 and subsequently fell to $15400. At present, it is entering the most boring price trend you can imagine, "he warned.
If the market allows (BTC) to visit $20.000 again, it would be a huge buying signal for those who have missed the accumulation in the region. Please remember that the next halving is in a year and a half from today, and I expect to see the next bull market in a year and a half from now, "Dr. Profit continued.
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