Key Points
- Bitcoin (BTC) starts off the post-halving week with bullish momentum, coming close to the $70,000 mark.
- The cryptocurrency market anticipates volatility as traders adjust to the new post-halving landscape.
Post-halving, Bitcoin (BTC) kicks off the week on a bullish note, inching towards the $70,000 threshold.
The cryptocurrency is potentially stabilizing after a successful halving, marking a new chapter in Bitcoin’s history.
Market Volatility Post-Halving
The past week saw Bitcoin’s price drop to six-week lows, testing the mettle of traders. However, analysts speculate the market may have weathered the worst.
Historically, halvings have resulted in a price drop for Bitcoin, followed by a dramatic recovery. However, these trends typically play out over months rather than days or weeks.
This halving cycle has been unique, with Bitcoin reaching a new all-time high before the halving event. As miners adjust to the post-halving reality, Bitcoin is expected to navigate a delicate geopolitical and macroeconomic landscape.
Post-Halving Price Triggers
After a quiet weekly close, Bitcoin’s price surged past $66,000, its highest level since April 15. Currently, the pair is a major focus for traders as the week’s first Wall Street open approaches.
The previous week saw selling during U.S. trading hours. Keith Alan, co-founder of trading resource Material Indicators, noted a significant block of ask liquidity above the spot price. Alan speculated that this liquidity was put in place to prevent the price from reaching the $70k range before traditional financial markets open.
In the current order book setup, Bitcoin is eating through some of the liquidity. Despite reaching weekly highs, Bitcoin did not liquidate large numbers of short positions, totaling a mere $17 million over the past 24 hours.
Post-Halving Price Predictions
With the block subsidy halving now complete, market participants are considering Bitcoin’s future reactions. Popular trader and analyst Rekt Capital suggests that Bitcoin is currently in a “re-accumulation phase” of consolidation around the halving.
Rekt Capital posits that the re-accumulation range could act as a perfect springboard for long-term gains. He suggests that any downside in the pre-halving period represented bargain-buying opportunities, and the upcoming several week consolidation will represent a similar opportunity.
Macro Factors Influencing Bitcoin
Adding to the volatility catalysts this week is a familiar face in the form of U.S. macroeconomic data prints. These include Q1 GDP and jobless claims, leading up to the March print of the Personal Consumption Expenditures (PCE) Index. The latter is known to be the Federal Reserve’s preferred inflation measure.
Risk assets continue to look for hints that interest rates will come down sooner rather than later. In an unusual development, central banks in Europe and the United Kingdom are poised to begin a rate-cut cycle before the Fed.
Bitcoin Transaction Fees
Bitcoin’s transaction fees have made headlines for the wrong reasons since the halving, at one point passing a near-record $200. Charles Edwards, founder of Capriole Investments, concluded that the new halving epoch represents a seismic shift for Bitcoin.
Edwards notes that Bitcoin trading beneath its electrical cost is extremely rare and never lasts long before redressing the balance. This comes from a combination of BTC price upside, unprofitable miners shutting down, and fees remaining higher than before.
Crypto Market Sentiment
While stocks enter a period of cold feet, crypto sentiment has gone the opposite way. The Crypto Fear & Greed Index currently sits just below the “extreme greed” zone at 73/100. Financial commentator Tedtalksmacro writes that the market has gifted us with a beautiful reset in trader positioning for Bitcoin.
