Main Points
- Bitcoin surpassed $65,000, rebounding from previous losses, ahead of the highly-anticipated halving event and amidst investor worries about geopolitical tensions.
- The introduction of spot Bitcoin ETFs has driven Bitcoin’s price to an all-time high before the halving event, a first in Bitcoin’s 15-year history.
- Bitcoin’s value remained above the critical $60K and 38.2% Fibonacci level post Israel’s retaliatory strike against Iran, suggesting that recent geopolitical concerns may already be reflected in the price.
Bitcoin (BTC), the leading cryptocurrency by market capitalization, rose above \(65,000 on Friday morning, recovering from earlier losses in anticipation of the imminent halving event expected to occur today or tomorrow. The price dipped below \)60,000 initially following reports of Israel’s retaliation against Iran for a recent drone and missile attack.
In a significant event akin to the Olympics for the pioneering cryptocurrency, Bitcoin will undergo its quadrennial halving, reducing the digital asset’s block reward from 6.25 to 3.125 bitcoins, historically leading to increased value in the subsequent months due to fewer coins entering circulation.
Nonetheless, Bitcoin has retraced by up to 19% from its peak of $73,835.57 on March 14, with some analysts suggesting that the decline indicates the halving’s impact has already been priced into the current valuation. They argue that the launch of spot Bitcoin exchange-traded funds (ETFs) has enhanced the asset’s pricing efficiency, propelling it to a new peak before the halving—a phenomenon unprecedented in Bitcoin’s 15-year history.
Market observers also note the distinct macroeconomic landscape today compared to the three previous halving events since 2012, characterized by higher interest rates and inflation rates that render risk-on assets like cryptocurrencies less appealing.
While acknowledging institutional investors as the driving force behind the recent surge, Bitcoin proponents anticipate a shift to bullish sentiment post-halving, attracting new retail traders. Miles Suter from Cash App expressed optimism, stating, “With previous halvings, we’ve witnessed a positive sentiment shift in the market post-event, drawing in new retail traders; I expect history to repeat itself.”
Analyzing the charts, Bitcoin’s price consolidated in a symmetrical triangle from March to early April before breaking out of the pattern last week, with prevailing bearish sentiment leading up to the halving.
Looking forward, it is crucial for investors to monitor whether the cryptocurrency can maintain levels above the psychological barrier of $60,000, a zone where price support coincides with the significant 38.2% Fibonacci retracement level. Notably, BTC tested this pivotal level early Friday following reports of Israel’s retaliatory action against Iran but encountered immediate buying interest, indicating that recent geopolitical tensions may already be factored into the price.
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