Analysts predict BTC’s trading range will hold relatively steady over the coming months as it solidifies hard-fought gains.
Crypto markets saw a resurgence over the weekend, with Bitcoin (BTC) leading the charge, signaling optimism that the recent downturn may be subsiding.
BTC saw a notable uptick of nearly 5% as of Monday morning, surpassing the $63,000 mark during U.S. Monday morning trading, per Yahoo! Finance. This small-scale surge followed the release of a U.S. April jobs report that fell below expectations, according to CoinDesk, alleviating concerns of imminent interest rate hikes.
At the time of publishing the article, bitcoin was valued at $63,800, marking a 4.6% increase, outpacing the broader CoinDesk 20 Index (CD20), which saw a 3% rise over the past 24 hours. Meanwhile, Ether (ETH) reclaimed the $3,000 milestone, experiencing a 3% uptick within the same timeframe. Other major alt-coins such as Dogecoin (DOGE), Shiba Inu (SHIB), and Near Protocol’s NEAR also saw gains ranging between 5% and 10%.”
In his recent essay published early Friday, Arthur Hayes, the former CEO of BitMEX, suggested that Bitcoin may have hit its lowest point of the week at $56,000. He noted how this indicates a potential semi-permanent turnaround. However, he cautioned investors to brace for a gradual ascent rather than a rapid recovery to March’s highs, as he anticipates a cooling period in the market over the next few months.
“Did Bitcoin reach a local low […] earlier this week?” asked Hayes. “Yes,” he affirmed. “I anticipate prices to stabilize, fluctuate, and then begin a slow upward trend.” Looking ahead, he predicted “a surge beyond $60,000 followed by a period of consolidation between $60,000 and $70,000 until August.”
Hayes additionally noted that “the price action played out as I expected. US tax season, consternation over what the Fed will do, the Bitcoin halving sell the news event, and a slowdown of US Bitcoin ETF asset under management (AUM) growth coalesced over the prior fortnight to produce a well-needed market cleansing.”
Bitcoin’s downturn over the last month coincided with mounting apprehensions among Federal Reserve policymakers about stubborn inflation in recent months. Some traders have even begun to dismiss the likelihood of any rate cuts occurring this year. This shift has propelled the U.S. dollar index to its highest level since November, typically signaling a bearish trend for riskier assets such as cryptocurrencies.
Also crucial as of late was the much anticipated Bitcoin halving event. This is a crucial event programmed into the protocol that occurs approximately every four years. During a halving event, the number of new Bitcoins created and earned by miners for validating transactions is cut in half. This means that the rate at which new bitcoins enter circulation decreases, ultimately reducing the available supply.
The reduction in the rate of supply growth can have significant implications for Bitcoin’s price dynamics due to the principles of supply and demand. With the issuance of new bitcoins slowing down, the rate at which the supply increases decreases. If demand remains constant or increases, this reduction in supply growth can lead to a supply shortage or scarcity, potentially driving up the price.
Furthermore, on this front, analysts David Han and David Duong from Coinbase highlighted this week’s Federal Open Market Committee (FOMC) meeting. During this meeting, policymakers indicated their reluctance to implement rate cuts. Instead, they announced a slowdown in the central bank’s balance sheet reduction, known as quantitative tightening (QT), which was interpreted as a dovish signal.
According to Jyotsna Hirdyani, the South Asia Head at Bitget, after Bitcoin halves, the cryptocurrency market typically enters a phase marked by “increased volatility and price exploration.”
He cites past trends showing that post-halving periods witness substantial market fluctuations, often resulting in Bitcoin achieving new all-time highs (ATH). The market’s endurance and the rising institutional attraction towards Bitcoin have fostered a sense of optimism among investors, sparking speculation about the possibility of Bitcoin reaching unparalleled price thresholds.
What this means for the average investor remains to be seen, but these encouraging market signals from the cryptosphere are reassuring for long-time holders.
The post Bitcoin Holds at $63k: What Insiders Say Will Happen Next appeared first on Resist the Mainstream.
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Author: Greg Zink
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