Bitcoin (BTC) continued to cut support at $42,900 in the early hours of Thursday as the focus of the crypto ecosystem turned to the upcoming Bitcoin halving, which many expect will spark the next leg in the ongoing bull market.
But with the halving not expected until late April, many traders were happy to book profits and wait for a potential lower entry point as pre-halving periods are known for volatility and flash crashes.
#BTC
Bitcoin revisited the Macro Diagonal in the Pre-Halving period
History has repeated itself$BTC #Crypto #Bitcoin pic.twitter.com/Rzyw0SFPjg
— Rekt Capital (@rektcapital) January 30, 2024
That was reflected in the derivatives market, as “February Bitcoin futures prices are lower again in early US trading Thursday,” according to Kitco senior technical analyst Jim Wyckoff, who added that “Trade has been choppy recently.”
Bitcoin futures 1-day chart. Source: Kitco
“Bulls and bears are on an even overall short-term technical playing field,” Wyckoff said. “The direction in which prices break out above the resistance line or below the support line will most likely be the next significant near-term price trend for Bitcoin.”
Data provided by CoinWarz shows that the Bitcoin halving is expected to happen in 78 days, on Friday, April 19.
The “Bitcoin halving has historically caused price spikes, driven by the reduced rate of new Bitcoin creation, creating scarcity and increasing demand,” Stefania Barbaglio, CEO of Cassiopeia Services, said in a note to Kitco Crypto. “Despite this historical trend, various factors such as market sentiment, macroeconomic conditions, regulatory developments and technological advances affect Bitcoin’s price.”
“In my view, the recent rise in prices, fueled by expectations related to the approval of spot Bitcoin ETFs, has generated positive market sentiment,” she said. “While regulatory developments may take time, Bitcoin’s emergence as a new asset class is certainly underway. The current macroeconomic backdrop, characterized by expected interest rate cuts in 2024 and rising inflation, positions cryptocurrencies, especially Bitcoin, as attractive stores of value and potential hedges against inflation.
This sentiment was echoed by Zac Townsend, co-founder and CEO of Meanwhile, a life insurance provider powered entirely by digital assets.
“If previous Bitcoin halving cycles have shown us anything, it’s that this halving is poised to fuel the next bull run,” he said in a note to Kitco Crypto. “Traditionally, these events have correlated with significant price increases, and the ongoing decline in block rewards adds to the story of Bitcoin’s scarcity.”
“With declining supply, there is potential for increased demand, which creates conditions for an increase in prices,” Townsend said. “Bitcoin has consistently seen notable rises to all-time highs roughly a year after the halving event, making it imperative to keep a close eye on developments in 2025.”
“Besides the move to the halving, I expect the lasting impact of the spot ETF to play a significant role in influencing the price of Bitcoin as well,” he added.
According to s report from Finder, a panel of 40 industry specialists predicts that Bitcoin’s price will rise to an average of $77,423 by year-end 2024 before rising to $122,688 in 2025.
“The halving, easing macro conditions and improved access by ETFs are fundamentally positive price forces for the year as a whole,” said Vetle Lunde, senior analyst at K33 Research.
Lunde said he thinks Bitcoin will peak at $79,000 in 2024, before reaching $150,000 in 2025, as it will take time for inflows into ETFs to “materialize in price impact as it also introduces structural changes to the market .”
“Overall, the majority (58%) of panelists say now is the time to buy BTC, 38% to hold, and only 5% to sell,” Finder concluded.
At the time of writing, Bitcoin is trading at $43,000, down 1.43% on the 24-hour chart.
BTC/USD Chart by TradingView
Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of information provided; nor Kitco Metals Inc. however, neither the author can guarantee such accuracy. This article is for informational purposes only. This is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article does not accept liability for losses and/or damages arising from the use of this publication.
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