With a 1% increase following Bitcoin’s halving, which has it trading at $64,766, the potential new supply squeeze could trigger new bullish market.
This event supports Bitcoin’s total supply to remain at 21 million BTC by reducing mining rewards from 6.25 BTC to 3,125 BTC per block.
The halving event aims to increase Bitcoin’s scarcity and potentially boosting prices. However, Bitcoin’s stability at around $64,000 has prevented the market from showing a sudden and significant response to this important event.
Bitcoin Halving: Supply Crunch Shakes the Market
The fourth Bitcoin halving occurred at the 840,000th block and it was a turning point in managing Bitcoin’s supply by reducing mining rewards from 6.25 BTC to 3,125 BTC per block.
Occurring regularly every four years, the halving process helps limit Bitcoin’s total supply to 21 million while also slowing down the pace of new Bitcoin production. This has the potential to increase scarcity of the cryptocurrency, creating upward pressure on the price.
The Bitcoin network completes the fourth-ever ‘halving’ of rewards to miners https://t.co/2ZoDt4k69b
— CNBC (@CNBC) April 20, 2024
However, the fact that Bitcoin’s price has stabilized around $64,000 after this halving indicates that the market may have already priced the event. This might reflect a more experienced and mature market structure compared to previous halving events.
The direct impact of the halving can be summarized as follows:
Halving halves mining rewards, limiting new Bitcoin supply.
Market response indicates the event was priced in as an expected development.
Historically, increases in Bitcoin prices have been observed after halvings, but the unique circumstances of each halving can yield different outcomes.
Evaluating the long-term effects of this halving will require more data and time. However, this strategic decrease in Bitcoin’s supply is considered an important development, especially for long-term investors.
Bitcoin Halving 2024: Miner Rewards Spark Interests in Mining Stocks
The Bitcoin halving, which occurred on April 20, 2024, saw the block reward decrease from 6 BTC to 3,125 BTC, significantly impacting the mining sector. This happens approximately every four years and markedly affects the financial sustainability of mining activities.
This halving has particularly major implications for large mining companies’ shares, leading investors to speculate about which companies will most effectively adapt to the new reward structure. For example, notable increases were observed in the stocks of Nasdaq-listed mining firms like Riot Platforms (RIOT), Marathon Digital (MARA), and Clean Spark (CLSK), with over 10% growth.
Effects of the halving:
Direct Impact on Mining Profitability: Reduction of mining rewards directly affects mining revenue.
Speculation Reflected in Stocks: Significant increases were seen in the stock prices of Nasdaq-listed mining firms before the halving.
Adjustment of Operational Strategies: Mining companies had to adjust their operational strategies to offset the financial impact of reduced rewards.
Seeking Additional Capital: Mining companies sought additional capital to remain competitive and improve operational efficiencies.
Historical trends suggest that mining revenues typically see a short-term decline after halvings, but a potential price increase of Bitcoin and the expansion of major mining operations indicate a tendency for recovery within the year.
Bitcoin Price Forecast
The current resistance level for Bitcoin (BTC/USD) is set at $67,329, with additional resistance at $69,232 and $71,425 potentially limiting upward movements. Meanwhile, the immediate support for Bitcoin is at $63,045, with further support at $61,387 and $59,686 in case of declines.
The Relative Strength Index (RSI) is currently at 51, indicating a neutral market. A notable downtrend resistance of $65,214 signifies that Bitcoin staying below this level could sustain downward pressure.
Bitcoin Price Chart
On the other hand, a breakout above this resistance level could positively change market momentum, signaling further upward potential for Bitcoin.
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Legal Disclaimer: Cryptocurrency is a high-risk asset class. This article is for informational purposes and is not investment advice. It is possible to lose all of your capital.
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