Bitcoin
and other cryptocurrencies fell on Thursday, weakening further since a selloff that rocked digital assets and stocks a week ago. Traders are bracing for further declines, even as a key catalyst looms that could propel prices higher.
Bitcoin price fell 4% over the past 24 hours to $61,100 and recently fell to $60,800, well below its 50-day moving average above $67,000, indicating a technical weakness in the market. The largest digital asset was hovering around $70,000 as recently as Friday – not far from its all-time high – before geopolitical tensions over Iran’s drone attack on Israel and renewed concerns about inflation sent it tumbling Bitcoin alongside
S&P500.
“Bitcoin has hit a brick wall with a halving as ETF demand calms while geopolitical risks and uncertainty over inflation and monetary policy come to the forefront,” said Antoni Trenchev, co-founder of crypto lender Nexo. “These factors could keep a check on Bitcoin in the meantime before the halving cycle plays out properly. A move to the $50,000 mark is not out of the question.
Bitcoin has faced similar headwinds to the stock market as geopolitical tensions and strong U.S. economic data have raised the prospect of lingering inflationary pressures that could prevent the Federal Reserve from cutting interest rates as soon as it thought so. Demand also cooled slightly for spot Bitcoin exchange-traded funds (ETFs), which were approved in the United States in January and marked the start of a new wave of investor interest in cryptos.
Nonetheless, crypto traders are optimistic about Bitcoin’s prospects due to the so-called halving, which is expected to take place on Friday or Saturday. Halving is a change in Bitcoin’s programmatic monetary policy that will halve the issuance of new tokens, limiting supply and increasing prices as long as demand remains stable or increases.
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“Bitcoin’s fourth halving cuts miner rewards in half, just three months after US ETFs sparked a buying spree for newbies. It is this supply-demand dynamic that will lead to $100,000 Bitcoin in 2024,” Trenchev said.
Trenchev is not the only one calling for Bitcoin at $100,000 following the halving, even if this rise does not happen immediately.
“In previous cycles … people would lose interest until emissions reductions actually took effect and triggered the associated rallies several months after the fact,” said Phillip Shoemaker, executive director of the audit group decentralized Identity.com. “By then, I think we’ll see the same thing, which is more turbulence and more volatility. But by the end of the year, I think Bitcoin will have reached around $100,000.
Beyond Bitcoin,
Ether
– the second largest crypto by market value – fell 4% to fall below the key $3,000 level. Smaller tokens were also weaker, with
Solana
sliding by 7% and
Ripple
down 4%. Memecoins fell, with
Dogecoin
down 8% and
Shiba Inu
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losing 3%.
Write to Jack Denton at [email protected]