Bitcoin Price Falls as Halving Approaches: Analysts See Cyclical Pattern
The price of Bitcoin (BTC) is falling, causing major trader liquidations. This decline coincides with the next halving event. Analysts suggest that volatility may be a recurring trend prior to the halving.
Bitcoin (BTC) has seen a notable decline today, following the previous day’s promising rally. Most recently, it was trading at $63,118, which implies a 3.9% fall in the last 24 hours.
This sudden decline has taken many investors and traders by surprise. The cryptocurrency market is closely monitoring the evolution of the situation.
Is Bitcoin’s Recent Crash a Pre-Halving Shakeup?
The volatility has caused significant liquidations by traders. In the last day alone, market volatility has led to the liquidation of positions of more than 96,000 traders, for a total of $276.17 million.
This total includes $202.35 million of long positions and $73.82 million of short positions, according to data from CoinGlass.
Additionally, the Bitcoin Fear and Greed Index has declined, going from a “Greed” level of 74 to 65. This recent fluctuation aligns with a broader market correction following last weekend’s geopolitically driven declines.
It is worth highlighting the risks of a war escalation in the Middle East, while it catalyzed a sharp decline in global markets. Cryptocurrencies were no exception.
The price of Bitcoin fell approximately 5% to $65,771. For its part, the second largest cryptocurrency on the market, Ethereum, plummeted to $3,193 after accumulating a drop of 8%.
However, news of the Bitcoin and Ethereum ETF approval in Hong Kong revived the market, briefly pushing Bitcoin above $66,000.
Multimillion-Dollar Liquidations: Analysts’ Opinion
The recent geopolitical movement has caused large liquidations in the cryptocurrency market. Recently, more than 600 million dollars were liquidated.
Various personalities have taken to X (formerly Twitter) to share their opinions and perspectives on the current movement of Bitcoin and cryptocurrencies. First of all, artmichel.eth points out that, for those people who wanted to buy Bitcoin, the time has come.
On the other hand, Javierbitcoin highlighted the importance and inherent quality of Bitcoin as a safe haven asset, especially in times of uncertainty. Finally, the renowned analyst Michaël van de Poppe highlighted to his 711 thousand followers the massive liquidations experienced recently, although he urged investors to remain calm.
Countdown to the Big Event
Interestingly, Bitcoin’s current volatility coincides with the next halving event scheduled for April 20, 2024. The halving will halve the reward for mining new Bitcoin blocks, an event with historical implications for the price evolution of the cryptocurrency.
Crypto analyst Rekt Capital observes a recurring pattern in Bitcoin’s behavior leading to halvings. Called the “Pre-Halving Retrace,” this pattern suggests a temporary retracement before potential price increases.
Rekt Capital emphasizes that this cyclical behavior is consistent across previous Bitcoin cycles.
“[Pre-Halving Retrace] has been the case in every Bitcoin cycle. This time is no different,” Rekt Capital wrote on its X (formerly Twitter).
Additionally, Rekt Capital notes that despite immediate price fluctuations, BTC remains above its Reaccumulation Range during the halving week.
This observation echoes recent analysis from a media outlet, highlighting Bitcoin’s repeated tests of the price barriers at $71,800 and $63,700. Although breaking these levels is challenging, news about the Hong Kong ETF and the impending halving could catalyze a new all-time high.
The complexity and volatility of the cryptocurrency market make it inherently unpredictable, with frequent price fluctuations. Bitcoin’s failure to hold the $63,700 support level could invalidate the bullish outlook, potentially leading to further price declines.
By Audy Castaneda