Despite Bitcoin experiencing a 15% decline from its 2023 peak, the $40,000 mark seems within a grasp’s distance, thanks to several crucial elements.
Bitcoin’s annual high approximately touched $31,000, after which it suffered almost a 15% fall, triggered by recent regulatory action against renowned crypto exchanges Coinbase and Binance, coupled with the Federal Reserve’s more assertive policy direction. Despite these hurdles, Bitcoin, priced at $30,429, shows a 60% rise year-to-date, maintaining resilience above the technical support benchmark of $25,000. This robust performance indicates the potential for a new upswing.
Impending Bitcoin Halving
On the horizon, in April 2024, is the next Bitcoin halving, a scheduled event that halves the supply rate of this digital currency every four years. Historical data reveals a pattern of significant price surges and fresh peak highs for Bitcoin following the three previous halvings in 2012, 2016, and 2020. Notably, Bitcoin recorded a 276% rise after the May 2020 halving.
Market analysts predict a period of asset accumulation leading up to the next halving. Bitcoin is expected to challenge its highest ever price of $69,000 in the coming 18 to 24 months. Some even forecast a soaring leap to $160,000 by April 2024.
BlackRock’s Bitcoin ETF Endeavor
BlackRock’s effort to establish a Bitcoin exchange-traded fund (ETF), as revealed by its application with the United States Securities and Exchange Commission (SEC), contributes significantly to the optimistic expectations for a Bitcoin price rally pre-halving. BlackRock, managing a mammoth $8.5 trillion in assets, boasts a nearly flawless ETF approval history with the SEC. Their Bitcoin ETF application expects a response from SEC around March 2024, just a month ahead of the halving.
Analysts argue that an SEC approval could turbocharge Bitcoin’s post-halving bullish prospects. Crypto Tea, a market analyst, points to BlackRock’s keen understanding of the imminent halving and its implications, such as the supply decrease and growing demand due to global hyperinflation.
Bitcoin’s Ascendancy in Market Dominance
Recent regulatory actions by the SEC against Binance and Coinbase have unsettled many leading altcoins, especially those tagged as “unregistered securities.” This turmoil coincides with Bitcoin’s market dominance exceeding 50% for the first time in two years. Capital seems to be flowing from altcoins to Bitcoin, perceived as a safer option relative to over 60 cryptocurrencies labeled as securities by the regulator.
Bitcoin’s increased dominance and mainstream acceptance, Michael Saylor of MicroStrategy predicts, will drive its market cap to encompass 80% of the entire crypto market in future years.
Bullish Bitcoin Price Pattern
Longer-term charts reveal Bitcoin displaying a clear “bull flag” pattern, hinting at a continuation of its broader recovery rally. This pattern culminates when the price breaches its upper trendline, followed by a rise roughly equal to the prior uptrend’s height. Consequently, Bitcoin’s bull flag target hovers around $35,500, a level providing significant support in May 2021 and May 2022.
However, for a bull cycle to commence, Bitcoin needs a decisive close above $35,500. Moreover, there is an ongoing inverse-head-and-shoulders (IH&S) pattern, a bullish reversal indicator, emerging simultaneously with the bull flag.
The IH&S pattern typically resolves when the price breaks above the neckline and ascends by a measure similar to the distance between the neckline and the lowest point of the middle trough. Sometimes, a retest of the neckline as support follows the initial breakout. If this pattern unfolds, the Bitcoin price could surge toward $40,500, a more than 60% rise from present levels, heralding a new bull cycle.