Key Points
- Bitcoin (BTC) surges past $70,000, approaching all-time highs.
- Bitcoin’s next block subsidy halving is just ten days away, with miners preparing for the reward per block to drop 50% overnight.
Bitcoin has started the second week of April in a bullish manner, with its price surpassing $70,000. The cryptocurrency, which spent the weekend slowly increasing, is now capitalizing on its gains and moving closer to its all-time highs.
Anticipation for Further Upside
As the first Wall Street open approaches, there is a palpable anticipation for further gains in trading circles. The question remains whether Bitcoin’s price momentum will deliver. There is a sense of familiarity in the crypto market this week, likely due to the excitement that has been building following several weeks of corrective moves.
Volatility is expected to continue, both upwards and downwards. Bitcoin’s next block subsidy halving is just ten days away, and miners are in the final stages of preparing for a 50% overnight drop in the reward per block. Therefore, network fundamentals are crucial to monitor going forward, with difficulty set to reach new record highs this week.
Elsewhere, the macroeconomic sentiment is cautious as markets consider the likelihood of a swift interest rate cut from the United States Federal Reserve.
Bitcoin Price Nears $72,000
Bitcoin is quickly attempting to reclaim the final lost ground below its all-time highs this week. The weekly close, which was around $69,000, followed an unusual weekend in which BTC/USD slowly increased, despite the absence of institutional players.
However, the real movement came afterward, with the Asia trading session witnessing sudden upside volatility which had peaked at $72,573 on Bitstamp at the time of writing. Thus, Bitcoin was up 2.5% on the day already.
Spot BTC buyers are eager, as shown by a chart indicating spot buyers leading derivatives on the move higher. These spot flows are crucial for several well-known market observers when it comes to maintaining bullish momentum.
For a popular trader, the $70,000 mark depended on continued interest. He commented that price swings of $2K are expected due to moderate volatility, and increasing buy volume and spot flows are needed this week to sustain above $70,000, at least in the near term.
Some traders saw the potential for a fresh retracement. A “very obvious” pennant structure now in place on daily timeframes could offer a trip back to $68,000 before fresh highs.
Also on the radar were two nearby “gaps” in CME Group’s Bitcoin futures market, both appearing as the price moved during weekends, now at around $64,000 and $68,500.
Key Inflation Marker
Another key week of U.S. macroeconomic data is due, potentially reinforcing the Fed’s views on rate cuts. While Bitcoiners are mostly focused on the halving, both the Consumer Price Index (CPI) and Producer Price Index (PPI) prints for March will come in the next few days.
The U.S. inflation narrative currently contrasts with signals from Europe. In recent speeches, Chair Jerome Powell has said that officials feel at ease with a data-driven approach to rate cuts, with inflation slowly ebbing and the economy withstanding the impact of tighter policy.
Markets have thus pushed back their expectations of when these might begin to close to the end of the year. The latest estimates from CME Group’s FedWatch Tool show the odds of a 0.25% cut in either June or July at under 50%.
Bitcoin Miners Brace for Cost Upheaval
It’s Bitcoin halving season, and attention is increasingly focusing on miner preparations. There are under two weeks until the amount of “new” bitcoins unlocked per mined block decreases by 50% to 3.125 BTC.
Miners have increased selling this year, and now, analysts see a period of adjustment ahead. Bitcoin mining costs are set to double by the end of the month after the halving, jumping from $40K to $80K for S19 XPs, commonly utilized by US miners.
Mining costs are already double what they were in 2020, but BTC price gains had mitigated the impact on miners’ bottom line. A lack of further upside now could thus take its toll on smaller participants with less leeway for fluctuating market forces.
As such, Bitcoin network fundamentals are coming into the halving looking stronger than ever. Mining difficulty, already near all-time highs, is due to increase by approximately 2% on April 11 to pass 85 trillion for the first time.
Despite nearly a month of consolidatory BTC price action, data shows that difficulty ultimately decreased by less than 1%. The mining hash rate tells a similar story. Raw data now puts the total processing power deployment to the network at 684 exahashes per second (EH/s).
Output from known mining pools is practically at the highest ever seen, the numbers show. Preparations for the halving have come from various sources. Among them was a declaration of intent to increase mining output sixfold before the event by Bitdeer Technologies, the Bitcoin mining partner of the Kingdom of Bhutan.
Last week, it was reported that Bitcoin’s long-term holders (LTHs) had become increasingly active sellers at current prices. Older coins are also moving on-chain as LTHs’ spent output profit ratio (SOPR) swings more in their favor.
For an on-chain analyst at a crypto analytics firm, however, this is perfectly normal — and should not result in sellside pressure overcoming the market. He suggested that the recent trip to $73,800 looks like just about every previous ATH break. Long-Term Holders start to spend their coins, taking advantage of the new inflowing demand and liquidity.
So far, history is simply repeating itself. LTH entities tend to shed around 14% of the BTC supply under their control in bull markets, and so far, less than half of this has left their wallets.
