Bitcoin (BTC) continued to chop around support at $42,900 in the early hours of Thursday as the focus of the crypto ecosystem has pivoted to the upcoming Bitcoin halving, which many expect will spark the next leg up in the ongoing bull market.
But with the halving not expected until late April, many traders have been happy to book profits and wait for a potential lower entry point as pre-halving periods are known for volatility and flash crashes.
#BTC
Bitcoin has revisited the Macro Diagonal in the Pre-Halving period
History has repeated itself$BTC #Crypto #Bitcoin pic.twitter.com/Rzyw0SFPjg— Rekt Capital (@rektcapital) January 30, 2024
This was reflected in the derivatives market, as “February Bitcoin futures prices are lower again in early U.S. trading Thursday,” according to Kitco senior technical analyst Jim Wyckoff, who added that “Trading has turned choppy recently.”
Bitcoin futures 1-day chart. Source: Kitco
“Bulls and bears are on a level overall near-term technical playing field,” Wyckoff said. “The direction in which prices break out above the resistance line or below the support line will very likely be the next significant near-term price trend for Bitcoin.”
Data provided by CoinWarz shows that the Bitcoin halving is expected to occur in 78 days, on Friday, April 19.
The “Bitcoin halving has historically triggered price increases, driven by the reduced rate of new Bitcoin creation, creating scarcity and boosting demand,” said Stefania Barbaglio, CEO of Cassiopeia Services, in a note to Kitco Crypto. “Despite this historical trend, various factors such as market sentiment, macroeconomic conditions, regulatory developments, and technological advancements influence Bitcoin's price.”
“In my view, the recent surge 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, marked by expected interest rate cuts in 2024 and rising inflation, positions cryptocurrencies, particularly 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 that operates entirely using digital assets.
“If past Bitcoin halving cycles have shown us anything, it's that this halving is poised to supercharge the next bull run,” he said in a note to Kitco Crypto. “Traditionally, these occurrences have correlated with substantial price upswings, and the continuous decrease in block rewards adds to the narrative of Bitcoin's scarcity.”
“With diminishing supply, there is potential for heightened demand, creating conditions for a rise in prices,” Townsend said. “Bitcoin has consistently witnessed notable increases to all-time highs roughly a year following the halving event, making it crucial to keep a close eye on the developments in 2025.”
“Beyond the movement following the halving, I expect that the lasting impacts of the spot ETF will also play a significant role in influencing the price of Bitcoin,” he added.
According to a report from Finder, a panel of 40 industry specialists predict 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 enhanced access through 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 effect, 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 trades at $43,000, a decrease of 1.43% on the 24-hour chart.
BTC/USD Chart by TradingView
