Bitcoin (BTC) experienced a temporary drop below $60,000, causing concern among investors as the halving approaches. Bulls are hopeful that BTC will rebound and reach $80,000, thanks to the anticipated supply shock.
Just two days before the fourth Bitcoin halving, BTC suffered a significant setback by dipping below $60,000, a crucial support level. However, the cryptocurrency quickly bounced back and is now trading above $62,000.
The upcoming Bitcoin halving, scheduled for April 20th, is a highly anticipated event for the network and the community. During the halving, the reward given to miners will be cut in half, reducing it from 6.25 to 3.125 BTC. This measure is designed to control the supply of Bitcoin, as there will only ever be 21 million BTC tokens in existence.
Halvings make new Bitcoin coins scarcer and potentially more valuable, similar to precious metals. While miners receive fewer coins as a reward, the remaining coins could see an increase in value. This event also affects miners, forcing them to become more efficient or even cease operations. The profitability of miners is closely correlated with the price of Bitcoin, and the halving always has an impact on the industry and the asset’s price.
Earlier this year, BTC reached an all-time high of nearly $74,000, largely driven by institutional adoption. Many investors bought BTC in anticipation of a record-breaking rally after the halving. Historically, BTC has set new all-time highs in the months following its halving. With the upcoming halving and the recent launch of a BTC spot ETF, which has attracted a new wave of investors, experts predict that the digital asset could reach $100,000 by the end of the year.
Currently, BTC is trading at $62,707 after experiencing a 1.7% surge in the last 24 hours. However, the coin is still in the red after a 10% dip in the last 7 days.
Despite the struggles in price leading up to the halving, experts believe that a supply shock will result in a significant price increase. With reduced supply and increased demand, prices are expected to rise in the coming days and weeks.
It is worth noting that Bitcoin’s price gains have diminished with each halving event, although they have still been substantial. In the past three cycles, the price multiplied by 93x, 30x, and 8x, respectively. If this pattern continues, the next rally may be less than 8x, but it could still yield massive profits for investors. Additionally, the popularity of BTC is currently at an all-time high, especially after the launch of a BTC spot ETF earlier this year. The influx of institutional investors could further drive up prices.
Crypto analyst Julio Moreno from CryptoQuant speculates that the drop in Bitcoin’s price may be slowing down. His analysis suggests that traders have already taken most of their profits, potentially reducing selling pressure.
Overall, while there are short-term fluctuations in Bitcoin’s price, the long-term outlook remains positive. The halving and the growing institutional interest in BTC are expected to contribute to its continued growth and potential for substantial profits for investors.
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