Analysts predict that following the halving, the price of bitcoin might increase by an additional 160% and reach $150,000.
Only ten days remain until the eagerly anticipated halving, and as of right now, Bitcoin is still trading over the crucial $70,000 barrier, supporting market analysts’ optimistic long-term price projections.
In the wake of the halving, the price of Bitcoin may increase by more than 160% to beyond $150,000, as to a study paper provided by Bitfinex researchers.
“We project a 160% post-halving price surge in the next 14 months, taking the price to between $150,000 and $169,000.” This is based on a simple regression model.
In the 24 hours before 11:50 am UTC, the price of bitcoin dropped by 2.2%, closing at $70,694. CoinMarketCap data shows that the world’s first cryptocurrency is up more than 7.5% on the weekly chart.
The fact that Bitcoin reached a new all-time high prior to the halving for the first time in cryptocurrency history, according to the analysts, has caused more built-up selling pressure than in past cycles.
For Bitcoin bulls, this is encouraging, but it might potentially result in strong selling pressure because 1.87 million BTC, or 9.5% of the total supply, were purchased beyond the $60,000 threshold. The analysts pointed out:
This highlights how Short-Term Holders are actively participating at higher prices, demonstrating changing ownership dynamics in the context of market activity and institutional influence via spot ETFs. A change in the cycle towards the progressive dispersion of dormant supply and profit-taking is suggested by increased entity mobility.
However, the Federal Reserve’s quantitative tightening, which is draining market liquidity, may cause Bitcoin values to fall precipitously during the halving period. Co-founder of BitMEX Arthur Hayes stated in a blog post dated April 8:
“For this reason, I think the price of Bitcoin and cryptocurrencies in general will drop around the halving. It will fuel a ferocious firesale of crypto assets.”
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A major factor in the price increase of Bitcoin has been the inflows from US spot exchange-traded funds (ETFs).
According to research by CryptoQuant, by February 15, when the value of the largest cryptocurrency in the world crossed the $50,000 threshold, the Bitcoin ETFs accounted for almost 75% of new investments.
Over 841,900 BTC, or $59.2 billion, have been accumulated by the Bitcoin ETFs since its inception, accounting for 4.28% of the total amount of Bitcoin in circulation.
According to Dune, based on the accumulation pattern observed over the last two weeks, the Bitcoin ETFs are expected to absorb 2.6% of the total Bitcoin supply annually.
According to Dune statistics, Bitcoin ETFs saw net inflows of over $500 million last week, with a total of $286 million on April 8, the first trading day of this week.
The rise of Bitcoin ETFs has several implications for the cryptocurrency ecosystem.
Firstly, it enhances liquidity by attracting a broader investor base, including institutional players who may have been previously hesitant to enter the market due to regulatory concerns or operational barriers.
This influx of liquidity can contribute to reduced volatility and improved price stability over time, making Bitcoin a more attractive asset for both investors and merchants.
Moreover, the proliferation of Bitcoin ETFs facilitates price discovery and market efficiency by providing transparent and easily accessible price exposure to Bitcoin.
This transparency can help mitigate some of the concerns surrounding price manipulation and market integrity that have plagued cryptocurrency markets in the past.
Additionally, the approval and regulation of Bitcoin ETFs by financial authorities signal a maturing regulatory environment, which in turn fosters greater investor confidence and participation in the cryptocurrency space.
However, it’s essential to acknowledge potential risks associated with Bitcoin ETFs, including counterparty risk, regulatory uncertainty, and the possibility of market distortion due to excessive speculation.
As the influence of ETFs on the cryptocurrency market continues to grow, it will be crucial for regulators to strike a balance between fostering innovation and ensuring investor protection.
Overall, the increasing presence of Bitcoin ETFs represents a significant step towards the mainstream adoption and legitimization of cryptocurrencies as a legitimate asset class in the global financial landscape.
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