Bitcoin’s 1% rise after halving, trading at $64,766, is creating a potential supply squeeze that could trigger a new bull market.
This event, by halving mining rewards from 6.25 BTC per block to 3,125 BTC, supports Bitcoin’s total supply limit of 21 million BTC.
The halving process aims to increase Bitcoin’s scarcity and potentially boost prices as a result. However, Bitcoin’s stability around $64,000 seems to prevent the market from showing a sudden and significant reaction to this important event.
Bitcoin Halving: Supply Squeeze Rocks the Market
The fourth Bitcoin halving took place at block 840,000 and this important event marks a turning point in the management of Bitcoin supply by reducing mining rewards from 6.25 BTC per block to 3,125 BTC.
This halving, which occurs regularly every four years, helps limit Bitcoin’s total supply to 21 million and also slows the pace of new Bitcoin production. This has the potential to increase scarcity for 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, Bitcoin’s balance around $64,000 after this halving suggests that the market may have already priced in the event. This could reflect a more experienced and mature market structure compared to previous halving events.
The direct impact of halving can be summarized as follows:
Halving mining reward cuts restrict new Bitcoin supply.
The market reaction indicates that the event has been priced in as an expected development.
Historically, although price increases have been observed after halving events, each halving may yield different results due to unique conditions.
More data and time will be needed to evaluate the long-term effects of this halving. However, this strategic decrease in Bitcoin’s supply is considered an important development, particularly for long-term investors.
Bitcoin Halving 2024: Mining Rewards Spark Volatility in Mining Stocks
Bitcoin halving on April 20, 2024, with the reduction of block rewards from 6 BTC to 3.125 BTC significantly affected the mining sector. This event, occurring approximately every four years, significantly influences the financial sustainability of mining activities.
This halving has made a significant impact on the stocks of large mining companies, sparking speculation about which companies can most effectively adapt to the new reward structure. This has led to over 10% increases in stocks of large mining companies such as Riot Platforms (RIOT), Marathon Digital (MARA), and Clean Spark (CLSK).
The effects of halving are:
Direct Impact on Mining Profitability: Decrease in mining rewards directly affects mining activities’ income.
Speculation Reflected in Stocks: Significant stock price increases for mining companies listed on Nasdaq were observed prior to the halving.
Adjustment of Operational Strategies: Mining firms have had to adjust their operational strategies to balance the financial impact of reduced rewards.
Search for Additional Capital: Mining companies have sought additional capital to remain competitive and increase operational efficiencies.
Trends observed throughout history indicate that, although miner revenues usually dip in the short term after halving, Bitcoin prices have shown a tendency to recover within the year due to the potential price increase and expansion of major mining operations.
Bitcoin Price Prediction
While the current resistance level for Bitcoin (BTC/USD) stands at $67,329, other resistance levels at $69,232 and $71,425 may limit any potential increases. At the same time, immediate support for Bitcoin is positioned at $63,045, with additional support levels at $61,387 and $59,686 in the event of a decrease.
The Relative Strength Index (RSI) is currently at a value of 51, signifying a neutral position for the market. A distinct downward trend resistance at $65,214 is notable; therefore, Bitcoin’s staying below this level could sustain downward pressure.
Bitcoin Price Chart
Conversely, a break above this resistance level could positively change market momentum for Bitcoin, indicating further potential for increases.
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