Bitcoin Price To Face Selling Pressure Ahead Of BTC Halving
Bitcoin could be facing seller's pressure as the halving approaches.
Key Takeaways
- Bitcoin halving and ETF trends may signal market downturn.
- Selling pressure rises with unrealized gains and ETF inflow drop.
- Bitcoin’s technical pattern suggests potential for further price corrections.
The upcoming Bitcoin halving event, coupled with reduced inflows to Bitcoin exchange-traded funds (ETFs) and traders holding onto substantial unrealized gains, might lead to a market downturn.
CryptoQuant’s head of research, Julio Moreno , pointed out the growing selling pressure due to these unrealized profits. He also anticipates further drops in Bitcoin prices if the inflow into spot Bitcoin ETFs declines.
Bitcoin Fundamentals
The CryptoQuant’s net unrealized profit and loss (NUPL ) indicator, with a current value of 0.606, indicates a high likelihood of investors selling off their holdings to realize gains, which could depress Bitcoin‘s value further.
Bitcoin ETFs recently experienced a significant decrease in net inflows, suggesting a cautious or bearish sentiment among investors. Despite the concerns, the demand for Bitcoin ETFs remains strong. For instance, IntoTheBlock reports the total flow has risen since March 19 and is $418 today.
The halving event, which will reduce mining rewards from 6.25 BTC to 3.125 BTC, does not necessarily mean higher mining costs will negatively affect Bitcoin’s price.
CoinShares anticipates the post-halving production cost for miners to average around $37,856. Additionally, miners selling a portion of their reserves for profit, noted in the lead-up to previous halvings, is also observed in 2024, with miner reserves at a two-year low.
The Bitcoin halving, set for around April 19, 2024, remains a critical event that could redefine the market dynamics and the valuation of Bitcoin, balancing the potential for both risk and reward in the cryptocurrency landscape.
Bitcoin (BTC) Price Analysis
On March 13, 2024, Bitcoin achieved a high of $73,800. From February 26 onwards, its price formed an ascending triangle, suggesting a potential end to the upward momentum through either an ending diagonal or a rising wedge pattern, signaling a likely downturn.
Bitcoin’s price dropped, falling 18% to a low of $60,600 on March 20. Nevertheless, it bounced back, with Bitcoin’s price climbing to $71,000 the day before and eyeing further gains on March 26.
This uptick mirrored a corrective pattern, hitting the 0.786 Fibonacci retracement level within an ABC correction sequence. A break above the current resistance could negate this trend, whereas a strong rejection might indicate a forthcoming deeper decline.
A key support level is projected at $52,600, with potential for some horizontal market movement due to increased selling pressure.
Disclaimers
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
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