Key Points
- Bitcoin’s price briefly dropped below $60,000 days before the anticipated Bitcoin halving.
- Despite the dip, traders remain optimistic about Bitcoin’s long-term prospects, citing historical patterns and institutional inflows.
The price of Bitcoin saw a temporary dip below $60,000 just days before the expected Bitcoin halving event. However, many traders are maintaining a positive outlook for Bitcoin’s long-term price trajectory, drawing from past chart patterns and the ongoing inflow from institutions.
Bitcoin and the Pre-Halving “Danger Zone”
Despite the recent price fluctuation, Bitcoin managed to reclaim a significant moving average indicator. This indicator has historically signaled the commencement of bull runs in previous market cycles. Crypto analyst Moustache noted that while some anticipate lower prices, Bitcoin’s reclaiming of this line last month suggests the cryptocurrency is just getting started.
According to another crypto analyst, Rekt Capital, Bitcoin has been in a pre-halving “danger zone” since March 14. During this period, Bitcoin has seen two retracements – a drop of 18% in March and another of nearly 16%. The analyst suggested that Bitcoin could be transitioning into a reaccumulation phase.
Technical Indicators and Future Outlook
Following the recent correction, key technical indicators have been reset. This suggests that Bitcoin is no longer in an overbought state, having dropped on the daily chart to 41 from 58 on April 8. The past week saw Bitcoin’s price fall by over 7%.
John Patrick Mullin, CEO and founder of Mantra, suggested that the recent geopolitical tensions between Iran and Israel could be a factor behind the drawdown. However, he noted that a bounce back was observed shortly after, indicating a positive long-term outlook.
Mullin also pointed out that historically, miners tend to sell Bitcoin around halving time, which could result in a short-term bearish trend. However, he considers these to be healthy corrections, as Bitcoin has maintained a consistent bullish trend for a while.
Bitcoin ETF Inflows and Post-Halving Rally
Traders remain positive due to the continued inflows from the 10 spot Bitcoin ETFs in the United States and the recent approval of spot Bitcoin ETFs in Hong Kong, set to launch for trading in the coming weeks.
These Bitcoin ETFs have seen over $12.5 billion in net inflows since their launch, accumulating over 838,000 BTC, worth $53.7 billion in total holdings. While post-halving periods are typically followed by short-term price stagnation, this cycle could be different due to the approval of Bitcoin ETFs.
Ivo Georgiev, CEO of Ambire, highlighted that this halving is unique as Bitcoin has received institutional approval in the form of an ETF. This means more retail and institutional investors are watching this event. The listing of the first batch of Bitcoin ETFs in Hong Kong is also expected to contribute to Bitcoin’s price rally.
Mullin added that the increasing number of global ETFs means an influx of ‘fresh’ funds into the crypto market, a factor he believes is underrated by most analysts. He predicts that more funds will enter the market, at a scale previously unseen in the crypto space.