Bitcoin halving took place a fortnight ago, but in the short-term, this exciting event has not proven to be the catalyst for a significant price rise as expected by the ‘bulls.’
Disagreements have arisen about much of this being out of the control of BTC. Due to the political instabilities in the Middle East and the seizing of bitcoins, the volatile crypto markets are plummeting drastically.
We saw this first on the 19th of April when bitcoin fell to below $60000 due to attacks that Israel had conducted on Iranian soil.
However, this came down from its recent high, and though this meant a price recovery, further unrest or escalation in this increasingly complicated conflict could pose further troubles.
Alas, resolve was tested on May 1, when the price dropped to $56,555. While $60k has psychologically impacted buyers, it is still considered a major high.
Here are five things we’ve learned since the halving that could help us understand the picture that might emerge from here.
1. April was Bitcoin’s worst month in almost two years
Bitcoin was under tremendous pressure in April, posting its worst monthly performance between November 2018 and January 2019. It began this month with an unprecedented high of $ 71,329. 30, the leading digital asset, moved 14 percent higher and is currently at. It dropped by 95% and closed the month at $59528. 70.
This downturn was quite a rude wake-up call, especially when the Crypto Fear and Greed Index registered values between Greed and Extreme Greed for many weeks. Of all the questions that are arising in people’s minds presently, one of the most poignant is: what next?
The potential for the future direction is uncertain, and analysts’ opinions differ. Some analysts have suggested that this could be the most we will get in this particular bear market and bull phase, while others are adopting the view that it could take some time before a new rally is seen. One thing is certain: This also marks the first time Bitcoin has reached an all-time low before a halving.
2. Forecasts are mixed on Bitcoin’s prospects
Bitcoin recently suffered a decline, and there are rumors that this can be attributed to BitMEX, but its former owner, Arthur Hayes, clearly understands the situation.
He names a set of events including the US tax season, speculations around Federal Reserve actions, the ‘sell the news’ phenomenon relating to the Bitcoin halving, and a slower increase in the value of Bitcoin ETF in the US.
However, Hayes thinks that Bitcoin has formed a local low and the price will range “between $60,000 and $70,000 until August.
On the other hand, Standard Chartered has reinforced its forecast, calling for Bitcoin to touch $150,000 by the end of the year, even as it warned of a possible drop to $50k. However, Bloomberg Intelligence’s senior commodity strategist, Mike McGlone, pointed slightly differently, saying that “sticky inflation” is linked to speculation in Bitcoin and equity prices and that the Federal Reserve might not ease interest rates “until then.”
3. Times are tough for Bitcoin ETFs
The increasing excitement that came with the U.S. Securities and Exchange Commission’s approval of Bitcoin ETFs in January seems to be dwindling. According to data from SoSo Value, investors recorded record outflows of $563 million via BTC ETFs on May 1 and consecutive net outflows for the next six days, ending only on May 3, though with $378 million in inflows.
Interestingly, the booming market of Bitcoin and Ethereum ETFs in Hong Kong did not match expectations of $8. Thus, the first-day trading volumes totaled $5 million—levels far below the $628 million achieved when the mechanism was launched in the United States. However, JAN3 CEO Samson Mow argues that these exchange-traded funds in Asia are yet to find their way.
4. A nervous wait for miners
CryptoQuant states that BTC miners could be in for rough times, although prices might need to bounce back in the coming weeks.
The increase in electricity costs and reduced block rewards to nominal values have pressured the industry. Head of research Julio Moreno says that today’s situation is the same as the “miner capitulation” that will happen if prices do not go up during the summer as the “hashprice,” which is the average miner revenue per hash, breaks new lows.
Adding to the miners’ hardship is that trading volumes tend to decrease during the summer, a historically unfavorable scenario for Bitcoin, particularly in June, July, and August.
5. Keep an eye on these two
Nevertheless, some upturned industry executives are not losing their passion for accumulating bitcoins. Michael Saylor heads MicroStrategy, and now it owns 214,400 BTC, on average, for a $35,180 cost per each. This consequently creates a paper profit of $8 at the current market price of $63,600. What this Means for the Company: Every year, the company could generate as much as 1 billion.
Furthermore, Block, the payments company with ex-Twitter CEO Jack Dorsey, has also recently begun routinely allocating around 2% of its gross profit to buying more Bitcoin. This robust support from an institution indicates that there may still be a light at the end of the tunnel regarding the future of the leading digital asset.
