What Can We Anticipate as the Bitcoin Halving Approaches in April 2024?
Bitcoin has once again caught the attention of the public as it surpasses the $52,700 mark, demonstrating a strong demand for the cryptocurrency. According to CryptoQuant, a firm specializing in on-chain data analytics, over 75% of new Bitcoin investments are flowing through spot Bitcoin ETFs, indicating a growing interest in the digital asset.
As Bitcoin continues its upward trend, market analysts are eagerly anticipating the upcoming halving event scheduled for April 2024. Speculation suggests that the price of Bitcoin could skyrocket and potentially reach its all-time high of $69,000, last seen in November 2021.
The previous halving event in 2020 resulted in a reduction of the block reward to 6.25 BTC, which led to a 30% decline in Bitcoin’s hash rate within a two-week period. However, the system quickly adjusted, and within seven weeks, the hash rate reached new all-time highs. Following the May 2020 halving, the price of Bitcoin experienced a significant increase, reaching a new high in just eight months.
Looking ahead to the upcoming halving, significant changes are expected. The rewards issued to miners per block will be halved, reducing from 6.25 BTC to 3.125 BTC. This adjustment aims to decrease Bitcoin’s inflation rate from 1.7% to 0.85% per year. However, it is anticipated that there may be a temporary dip in Bitcoin’s hash rate following the halving.
Furthermore, the reduction in the issuance of new Bitcoin supply may result in miners selling less. Historical data suggests that after a halving event, miners tend to sell fewer coins, thereby reducing their impact on the market. In addition to this, with expected rate cuts from the Federal Reserve and a strong interest in Bitcoin from major institutions, there is an estimated 85% chance of Bitcoin reaching its all-time highs within the next six months.
Analyzing the current price of Bitcoin, there is resistance near the $52,000 level. Nevertheless, there is a bullish momentum indicated by the upward-sloping 20-day exponential moving average at $46,947. Conversely, if the price falls below the 20-day EMA, it may indicate a short-term reversal.
The relative strength index (RSI) is currently above 81, suggesting a rapid rally in the near future. If the price manages to stay above $52,000, a rally towards $60,000 is expected.