The expert analyzed the market situation and explained how it could change in the coming week
RBC-Crypto does not provide investment advice, the material is published for informational purposes only. Cryptocurrency is a volatile asset that can lead to financial losses.
On Sunday, April 21, Bitcoin (BTC) is trading around $65 thousand, its price has increased by about 1% over the past week.. The specialist analyzed the market situation and assessed the prospects for the movement of the Bitcoin exchange rate over the next seven days.
BTC/USD
65 159 +1 348 (2.11%) Apr 21 14:08:22 1d 3d 1m 3m 1y 5l rbc.group
“The reaction to the halving was calm”
BitRiver financial analyst Vladislav Antonov
In the past week, the key factors for the crypto market were the approaching Bitcoin halving, geopolitical tensions between the United States, Israel and Iran, as well as the hawkish rhetoric of representatives of the US Federal Reserve on rates.
The approach of halving, which traditionally leads to an increase in demand and price of Bitcoin, supported the mood of large investors and cryptocurrency holders to hold coins in anticipation of a future rally. However, the escalation of the geopolitical conflict in the Middle East raised fears of a large-scale war with the participation of the United States. Investors feared that if the situation worsened, sellers could take advantage of this and collapse the Bitcoin market to the level of $52 thousand.
Hawkish rhetoric from the US Federal Reserve, forecasts for a later cut in interest rates and disappointing inflation dynamics have led markets to price in a delay in monetary policy easing until at least September. This restrained the activity of buyers of risky assets, including Bitcoin.
On Friday, April 19, all markets experienced increased volatility amid reports of an Israeli missile attack on Iran in response to a previous Iranian attack. Explosions were reported near the airport in Isfahan, where important Iranian military and nuclear facilities are located.. Iranian authorities subsequently stated that there was no airstrike, but only an unsuccessful attempt to launch drones that were shot down.
After Iran's claims of a false alarm, risk assets began to regain lost ground. The BTC/USDT pair recovered 9.82% to $65,450. The rebound partially fulfilled a reversal pattern on the hourly timeframe with three declining bottoms: $60,660, $59,678 and $59,600. At the end of the day, the BTC/USDT pair increased by 0.55% to $63,818.
On the night of April 20, the fourth halving occurred in the Bitcoin network at block 840,000. The reward for each mined block was halved — to 3.125 BTC from 6.25 BTC. Reward reduction is considered an important economic mechanism affecting the supply of Bitcoin and creating a scarcity of the asset.. Now only 450 BTC will be created per day.
Bitcoin experienced its fourth halving in history
The reaction of market participants to the halving was very calm, since this is an expected event that occurs once every four years. After previous halvings, the rally began 1-2 months later. This halving differs from previous ones in that spot Bitcoin ETFs were launched in the US in January. This obliges funds to enter the market and buy Bitcoin, increasing demand for it.. But now the focus of investors and speculators is on geopolitics. After the recent liquidations, buyers took a wait-and-see approach in anticipation of the deterioration of the Iran-Israeli conflict.
Commissions increased sharply after halving. This was influenced by the launch of a new standard of fungible tokens — Runes. Miners who process transactions select transactions with higher fees, and because of this, competition to include high-fee transactions has fueled the rise in Bitcoin fees.
Thus, the high fees that may be associated with new tokens and their effect on the Bitcoin network may prove to be an additional source of income for miners after the halving, when block rewards (their main source of income) have decreased. The situation is most likely temporary, and over time everything will return to normal when the fashion for the new standard passes and commissions become stable again.
The dynamics of Bitcoin were strongly influenced by movements in futures for the S&P 500 index, with which the cryptocurrency showed a high correlation. Despite the halving, fears of escalating conflict in the Middle East and tightening monetary conditions in the United States created significant turbulence and volatility in the Bitcoin market, restraining buying activity.
Since March 5, Bitcoin has formed a support zone of $59,000 — $60,500. It is likely that stops are now placed under it for long positions. BitRiver estimates major resistance lies between $67,300 — $68,000. For several days, buyers made attempts to resume growth, but geopolitical factors turned out to be stronger than technical ones. While the price is trading below $67,300, the current target for sellers will be the $52,000-$53,000 zone.