With a 1% increase in Bitcoin’s price following the halving, trading at $64,766 potentially creates a supply squeeze that could trigger a new bull market.
This event supports Bitcoin’s total supply to remain limited at 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, as a result, potentially raise prices. However, Bitcoin’s stabilization at around $64,000 appears to have prevented the market from showing a sudden and big reaction to this significant event.
Bitcoin Halving: Supply Squeeze Rocks the Market
The fourth Bitcoin halving took place at the 840,000th block, and this significant event marked a turning point in the management of Bitcoin’s supply by halving mining rewards from 6.25 BTC to 3.125 BTC per block.
This halving process, occurring every four years, helps limit Bitcoin’s total supply to 21 million while also slowing down the pace of new Bitcoin production, thereby creating upward pressure on prices.
The Bitcoin network completes the fourth-ever ‘halving’ of rewards to miners https://t.co/2ZoDt4k69b
— CNBC (@CNBC) April 20, 2024
However, the price of Bitcoin stabilizing around $64,000 post-halving indicates that the market may have already priced in the event. This reflects a more experienced and mature market structure compared to previous halving events.
The direct impact of the halving can be summarized as follows:
Halfing mining reward decreases new Bitcoin supply
Market response indicates the expected nature of the event
Historically, post-halving Bitcoin shows increases in price; however, each halving event’s unique conditions can lead to different results.
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 a significant development, especially for long-term investors.
Bitcoin Halving 2024: Mining Rewards Spark Fervor in Mining Stocks
The Bitcoin halving on April 20, 2024, which reduced block rewards from 6 BTC to 3.125 BTC, had a significant impact on the mining sector. This event occurs roughly every four years and significantly affects the financial sustainability of mining operations.
This halving particularly affected the shares of major mining companies, and investors began speculating on which companies could most effectively adapt 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 increases of over 10% in their share prices.
Effects of the halving:
Direct effect on mining profitability
Speculation reflected in stock prices
Adjustment of operational strategies
Search for additional capital
Historical trends show that while mining revenues generally fall in the short term after halving, Bitcoin’s potential price increase and the expansion of large mining operations typically result in recovery throughout the year.
Bitcoin Price Prediction
The current resistance for Bitcoin (BTC/USD) is set at $67,329, with other resistance levels at $69,232 and $71,425 potentially capping any upside. Meanwhile, the immediate support for Bitcoin is positioned at $63,045, with further support at $61,387 and $59,686 in the event of a downturn.
The Relative Strength Index (RSI) currently stands at 51, indicating a neutral market. A pronounced downtrend resistance surfaces at $65,214, thus Bitcoin remaining below this level could sustain downside pressure.
Bitcoin Price Chart
However, a breakout above this resistance level could positively shift market momentum, signaling further upside potential for Bitcoin.
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Legal Disclaimer: Crypto is a high-risk asset class. This article is for informational purposes and is not investment advice. You can lose all your capital.
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