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(Kitco News) - It was a mixed day for the cryptocurrency market on Thursday as Bitcoin (BTC) experienced slight downward pressure while multiple altcoins put on double-digit gains as traders looked to secure positions in their favorite tokens ahead of a possible bull market runup.
For stocks, the day was spent trading in the red as strong labor data in the U.S. all but assured that the Federal Reserve would continue to raise interest rates, prompting traders to adopt a risk-off approach when it comes to equities. At the close of markets, the S&P, Dow, and Nasdaq all finished in the negative, down 0.79%, 1.07%, and 0.82%, respectively.
Data provided by TradingView shows that Bitcoin experienced increased volatility on Thursday, with its price whipsawing to a high of $31,510 in the early hours only to reverse course and plunge to a low of $29,975 near midday before ultimately returning to support above $30,300.
BTC/USD Chart by TradingView
Kitco senior technical analyst Jim Wyckoff noted in his morning BTC update that there is “Not much new this week,” and said “The current pause and choppy trading at higher price levels suggests the bulls are storing up energy for another push higher in the near term. The bulls have the firm overall near-term technical advantage.”
The Bitcoin halving effect
The recent flurry of spot Bitcoin exchange-traded funds by some of the largest asset managers in the world continues to provide a high level of support for BTC and the broader cryptocurrency market, as some see it as a sign that institutional interest is once again returning for the asset class.
But for many crypto proponents, the rally's real start began in November, when BTC bottomed out at $15,450. This was touched on by Christian Hazim, a research analyst at Global X, who said “Bitcoin has demonstrated significant strength since it rebounded from the lows we saw back in November 2022.”
Hazim pointed to the effect that Bitcoin halvings have on the market as the impetus for the increase in strength and token prices and said that traders should expect a higher level of volatility for the crypto market over the next year.
“On analysis of previous market cycles, the year leading into a halving event is often characterized by volatility both to the upside and the downside,” he said. “Bitcoin’s committed userbase and continued adoption among retail and institutional investors alike gives us the conviction that bitcoin’s long-term upward price trend remains intact, however, in the short term we will likely continue to see a lot of chop.”
On November 12, market analyst Rekt Capital tweeted, “Historically, BTC tends to bottom 517-547 days prior to the next Halving event. The next Halving is 536 days away.” This trend held true as BTC price bottomed out nine days later and has been climbing the wall of worry ever since.
The upcoming Bitcoin halving date is currently predicted to occur on April 16, which has experienced crypto traders excited about the next nine months as previous cycles have demonstrated that the market can see massive gains during this period.
And the next halving holds the potential to see some of the biggest growth for Bitcoin to date, as it is the first time that a halving will coincide with less BTC available for purchase in the open market.
We've only seen the distribution phase of Bitcoin adoption.
— Joe Burnett (??)³ (@IIICapital) July 6, 2023
Price growth was muted each cycle because of new coins entering circulation.
The 2024 halving will coincide with less coins available for purchase.
This will be the first halving this has ever occurred. ?????? pic.twitter.com/didnzHfRV3
Diamonds in the altcoin rough
Broadly speaking, altcoins trended down on Thursday as the majority of tokens in the top 200 were in the red, while a trio of tokens managed to post double-digit gains.
Daily cryptocurrency market performance. Source: Coin360
eCash (XEC) recorded the biggest gain, increasing by 19% to trade at $0.00003642, followed by a 12% gain for Solana (SOL) and an 11.5% increase for Bitcoin Cash (BCH).
The overall cryptocurrency market cap now stands at $1.18 trillion, and Bitcoin’s dominance rate is 49.8%.
