Bitcoin (BTC) has experienced a decline of about 19% since it reached its all-time high (ATH) on March 14, 2024. This condition raises concerns about the current bull market’s longevity.
Despite the recent correction, many analysts believe it represents a healthy consolidation within the ongoing bull market, not its end.
Bitcoin correction signals market health, not end of Bull Run
On-chain data platform Santiment reports a shift in market sentiment. Data shows that the “bull market/cycle” mentions have risen since late March. Additionally, there is a decrease in FOMO (fear of missing out) sentiment and a rise in FUD (fear, uncertainty and doubt).
However, the prices have historically moved against the prevailing sentiment of the masses. Therefore, there is a potential for a recovery before or shortly after the impending Bitcoin halving.
Read more: What happened at the last Bitcoin halving? Predictions for 2024
The increase in the “bull market/cycle” mentions is in line with Bitcoin’s current price performance. Bitcoin is trading at $61,988 at the time of writing.
Interestingly, Bitcoin’s price drop contradicts the typical story surrounding Bitcoin halving. The quadrennial event has a history of being associated with BTC price increases. The upcoming Bitcoin halving is scheduled for a block height of 840,000, approximately on April 20, 2024.
Many experts believe this year’s Bitcoin halving could possibly change BTC’s typical price rise. This prediction is mainly due to the recent approval of the US spot Bitcoin ETFs.
Nevertheless, analysts see the current correction as a healthy move. Crypto analyst CryptoCon highlighted the need for corrections even within a bull market. He identifies the 20-week EMA at $55,600 as a key support level for Bitcoin.
“As long as Bitcoin continues to retest this moving average, we could see a nice smooth curve like 2017 to the top,” he explained.
Renowned analyst PlanB also maintains a positive long-term outlook for Bitcoin.
“[In my opinion]will this Bitcoin halving be no different…BTC top will be above $300,000 in 2025,” PlanB said.
In line with Plan B and CryptoCon, Hannah Phung, principal data analyst at Spot On Chain, said that price spikes tend to occur around 6 to 12 months after halving.
The experts’ opinion is consistent with Bitcoin’s historical data. After the first halving in November 2012, the price rose from around $12 to over $1,000 by late 2013. Similarly, the second halving in July 2016 saw the price of Bitcoin rise from around $650 to nearly $20,000 by December 2017. third halving in May 2020 resulted in a price increase of approximately $8,000 to $69,000 by November 2021.
Read more: Bitcoin Halving Countdown
Despite the positive outlook for Bitcoin’s price in the long term, the Bitcoin halving may remain a concern for miners. This year’s halving reduces the reward for mining a Bitcoin block from 6.25 to 3.125 BTC, which has a significant impact on miner profitability. As a result, miners face pressure to innovate and find ways to reduce costs while maintaining or increasing their Bitcoin output.
While this event could potentially impact miner profitability, a January 2024 study by CoinShares reveals that some miners may survive. In fact, miners with significant Bitcoin holdings and stronger capitalization tend to do better in bullish markets.
However, those with limited cash reserves and high operating costs per BTC are more vulnerable to Bitcoin’s price drops.
The recent correction, the impending halving and the newly approved US spot ETFs create a complex environment for Bitcoin price predictions. But overall, the long-term bullish sentiment remains strong among most industry experts.
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