Will Bitcoin’s price surge following the halving, or are there potential obstacles that could hinder its upward trajectory?
The long-awaited fourth Bitcoin (BTC) halving event has finally occurred, marking a significant milestone in BTC’s journey. Halving events, which happen approximately every four years, result in a 50% reduction in the number of Bitcoins awarded to miners for validating transactions. With this latest halving, the reward has decreased from 6.25 BTC to 3.125 BTC per block.
Despite the recent halving, Bitcoin’s price remains relatively stable. As of April 23, Bitcoin is trading at $66,500 levels, showing a 3.5% gain in the last twenty-four hours. The 840,000th block on the Bitcoin network, the halving block, was successfully mined by ViaBTC, earning the miner over 40 Bitcoins, equivalent to more than $2.6 million in block rewards and fees.
Now that the halving event is behind us, the focus shifts to what lies ahead for Bitcoin. Where will its price go, and what can we expect in the days to come? Let’s explore these questions to better understand Bitcoin’s situation post-halving.
Where is BTC headed next?
As Bitcoin enters the post-halving phase, several key indicators provide insights into its potential direction. Recent data from a Bitfinex report shows a significant increase in BTC outflows from centralized exchanges, reaching levels not seen since January 2023. This surge indicates a shift in investor behavior towards accumulation, driven by the expectation of price appreciation post-halving.
Additionally, an analysis of Bitcoin supply movements reveals a transition phase, characterized by a decrease in activity among long-term holders (LTHs) and an uptick in transactions involving newer investors. This decline suggests that LTHs may be taking profits. Meanwhile, the Market Value to Realized Value (MVRV) ratio for short-term holders (STHs) remains below historical peak levels, indicating room for further growth.
The successful absorption of supply from LTHs could support a bullish outlook for Bitcoin, potentially reinforcing critical price levels from a structural perspective. However, the likelihood of this scenario remains uncertain.
Will Bitcoin’s price rise?
Historically, Bitcoin prices have shown upward momentum for months following a halving event. However, this time, there may be a deviation from the norm due to various factors. One notable difference is the condensed nature of the price cycle surrounding this halving.
Unlike previous cycles, Bitcoin has already experienced significant surges and even reached new all-time highs before the halving. This accelerated growth trajectory could impact the usual post-halving gains. Additionally, regulatory approvals for Bitcoin investment products, such as spot Bitcoin ETFs, have brought optimism to the market.
The recent approval of ETFs in Hong Kong, along with previous approvals in the U.S., has enabled regulated retail investment in Bitcoin, potentially reducing market volatility. However, concerns about inflation reaching 4.8% by the 2024 election, as projected by Bank of America, add another layer of uncertainty.
With rising living costs in regions like Argentina and Turkey, where inflation is at record levels, investors may have limited disposable income, affecting their willingness to heavily invest in Bitcoin. As economic and geopolitical factors loom, caution is advised when allocating capital to Bitcoin.
What’s next?
Amid various predictions and observations about BTC’s future moves, analysts are divided in their outlook. Some are eyeing ambitious targets, while others remain cautious. One analyst has set a major target range for Bitcoin at $80,000 to $85,000, with potential for further growth.
On the other hand, another analyst remains bearish, pointing to an unreached target of $58,000 for Bitcoin. Renowned analyst Michaël van de Poppe described the halving as uneventful but sees it as a positive sign, suggesting that altcoins may take the spotlight in the next market phase.
While excitement and optimism abound, it’s essential to exercise prudence. Remember, never invest more than you can afford to lose.