Bitcoin’s small increase after the halving, trading at 64,766 dollars, is creating a potential supply squeeze that could trigger a new bull market.
This event supports Bitcoin’s total supply limit of 21 million BTC by reducing mining rewards from 6.25 BTC per block to 3,125 BTC.
The halving process aims to increase Bitcoin’s scarcity and potentially raise prices. However, Bitcoin’s stability at around $64,000 seems to have prevented the market from showing a sudden and significant reaction to this important event.
Bitcoin Halving: Supply Squeeze Shakes the Market
The fourth Bitcoin halving happened at the 840,000th block, a significant event that marks a turning point in managing Bitcoin’s supply.
This halving, which happens roughly every four years, helps limit Bitcoin’s total supply to 21 million while slowing down the speed of new Bitcoin creation, increasing the cryptocurrency’s scarcity and potentially putting upward pressure on its price.
However, Bitcoin’s price stabilizing around $64,000 after the halving suggests that the market may have already priced in the event, reflecting a more experienced and mature market structure compared to previous halving events.
The direct effects of the halving can be summarized as follows:
- Mining reward halving restricts new Bitcoin supply.
- Market reaction shows that the event is being priced in as an expected development.
Historically, price increases have been observed in Bitcoin following halvings, but the unique circumstances of each halving can lead to different results.
Additional data and time will be required to evaluate the long-term effects of this halving. However, this strategic reduction in Bitcoin’s supply is considered an important development, especially for long-term investors.
Bitcoin Halving 2024: Mining Rewards Spark Stock Sparks
The Bitcoin halving on April 20, 2024, which saw the block reward drop from 6 BTC to 3.125 BTC, had a significant influence on the mining sector. This event, which happens roughly every four years, significantly impacts the financial sustainability of mining activities.
In particular, this halving created a notable impact on the shares of large mining companies, leading investors to speculate on which companies will be most effective in adapting to the new reward structure. For example, Riot Platforms (RIOT) and other major mining firms such as Marathon Digital (MARA) and Clean Spark (CLSK) saw an increase of over 10% in their stock prices.
The impacts of the halving include:
- Direct Impact on Mining Profitability: Mining rewards decrease affects mining revenue directly.
- Speculation Reflected in Stocks: Before the halving, mining companies listed on Nasdaq saw significant increases in stock prices.
- Adjustment of Operational Strategies: Mining companies had to adjust operational strategies to balance the financial impact of reduced rewards.
- Search for Additional Capital: Mining firms sought additional capital to remain competitive and increase operational efficiency.
Trends observed throughout history show that while miner revenues tend to decrease in the short term following halvings, Bitcoin prices have generally shown a tendency to recover within the year due to the potential for price increases and the expansion of major mining operations.
Bitcoin Price Prediction
While the current resistance level for Bitcoin (BTC/USD) is set at $67,329, other resistance points at $69,232 and $71,425 may limit potential increases. At the same time, the instant support for Bitcoin is positioned at $63,045, with further support available at $61,387 and $59,686 in case of a downturn.
The Relative Strength Index (RSI) is currently at a value of 51, indicating a neutral market condition. A noticeable downward trend resistance was identified at $65,214; therefore, Bitcoin remaining below this level could sustain downward pressure.
On the other hand, a breakout above this resistance level could change market momentum positively, signaling further potential for a rise in Bitcoin.
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Legal Disclaimer: Cryptocurrencies are a high-risk asset class. This article is for informational purposes and is not investment advice. You can lose your entire capital.
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