Posted by Xoken.org – The Bitcoin (BTC) movement has spent a month in the US$12,000 price range since March. This period included a brief spike to a new record high of US$73,680, followed by a rapid decline to a low of US$59,630.
This shows doubts among traders and investors regarding the next direction of the market, especially after the Bitcoin halving there was no significant change.
Tokocrypto trader, Fyqieh Fachrur, explained that during this week after the halving on April 20, Bitcoin was still under pressure and negative sentiment. Several factors contributed to this negative performance, including anticipation of technology companies’ quarterly earnings reports in the United States to the Israel-Iran conflict.
Bitcoin’s negative performance this week can be attributed, to fears of a US stock market correction, escalating crises in the Middle East, and reduced confidence in China’s economy. Additionally, the funding rate turned negative for the first time this year, right before the recent halving event.
“A negative funding rate indicates that market sentiment has changed in a bearish direction when short positions are greater than long positions,” explained Fyqieh, Thursday (25/4/2024).
Furthermore, Fyqieh explained that the halving cycle this year will be slightly different compared to previous events. So far, there have been four Bitcoin halvings, on April 20, previously on May 11 2020, July 9 2016 and November 28 2012.
This halving resulted in a decrease in Bitcoin mining rewards by 50%, from 6.25 BTC to 3.125 BTC. As a result, the number of Bitcoins in circulation is increasingly scarce, causing a surge in demand among investors.
This is primarily because Bitcoin supply is limited, with only a maximum of 21 million coins in circulation at any time.
“Bitcoin price movements will be a bit different after this year’s halving, as BTC has experienced quite a large spike, and even reached new record highs before the halving itself. Therefore, the entire price cycle that usually surrounds this event appears to be more compressed,” said Fyqieh.
Bitcoin Halving
Another main reason why this Bitcoin halving has not caused a large price spike, is because the Fed or the US Federal Reserve has not given a strong signal for lowering interest rates.
Looking at the increase in prices after the halving in 2020, at that time the Fed had a fairly loose monetary policy with interest rates at that time relatively low.
“Bitcoin price stagnation after the halving can be considered a natural phenomenon. Many expected a significant price increase after the halving, even though the effects of this halving were actually felt 2-4 months after. For those who are still doubtful or unsure about the direction of Bitcoin price movements, “You can choose to use the Dollar Cost Averaging (DCA) technique, considering the recent uncertainty in the market which could potentially mean that Bitcoin is bullish or bearish,” he said.
Fyqieh estimates that the maximum Bitcoin price that Bitcoin still has a chance of reaching by the end of this year is around US$100,000 or around Rp. 1.6 billion. However, this achievement also depends on market sentiment and the potential for large demand from institutions.
Looking back at history, the halving in 2012 marked the beginning of Bitcoin’s meteoric rise, driving its price by 92x post-halving. Subsequent halving events in 2016 and 2020 saw significant increases of 30x and 8x respectively.