Bitcoin Drop Is Normal Post-Halving: Analyst

Bitcoin is under immense selling pressure at spot rates, tracking lower from the all-important resistance level of $66,000.

Bitcoin (BTC) price action is pivoting in the opposite direction after a strong rally in 2024, leaving some traders wondering what’s next for the flagship digital asset.

Following a new all-time high at $73,800, BTC price dropped by 12% in a single day, putting a spotlight on a key technical level and sparking speculation about a potential "crash." However, some analysts remain optimistic.

One analysis suggests that the current correction is part of the normal cycle of the crypto market. Instead of being alarmed by the price drop, traders are advised to continue accumulating BTC on dips, aiming for the Q1 2024 all-time highs, and anticipating further price discoveries.

Examining the daily chart formation, the analysis points out that the price action aligns with historical trends, particularly in the weeks following a halving event, where miner rewards are halved.

Bitcoin is currently in the fifth era after the halving on April 20, which reduced miner rewards from 6.25 BTC to 3.125 BTC, impacting miner revenue streams.

Despite the correction, BTC price is positioned at a familiar juncture. The analysis notes that before the halving event, BTC price typically rallies.

From October 2023 to March 2024, the price surged, rising from around $25,000 to record all-time highs. However, this surge in demand was also fueled by anticipation of the United States Securities and Exchange Commission (SEC) approving a spot BTC exchange-traded fund (ETF). The first such product began trading in January 2024.

The pre-halving rally was followed by a rapid correction after the event, with BTC dumping by 25% to reach a low of $56,500 in May.

After this phase, prices usually consolidate with minimal volatility before a final push lower to shake out traders.

Before prices advance further into the "Banana Zone," there is another extended consolidation phase with little price movement. It remains to be seen whether BTC is in the "Boring Zone" due to the current drop within the $56,500 and $73,800 zone.

Meanwhile, analysis from CryptoQuant reveals that whales have been dumping their BTC holdings over the last two weeks.

Data from the blockchain analytics platform shows that these long-term holders have sold approximately $1.2 billion in BTC, likely through brokers, which could be suppressing prices. Increasing outflows from spot Bitcoin ETFs have also slowed down the uptrend in the➵

News source：https://www.kdj.com/cryptocurrencies-news/articles/bitcoin-drop-normal-posthalving-analyst.html

The above is the detailed content of Bitcoin Drop Is Normal Post-Halving: Analyst. For more information, please follow other related articles on the PHP Chinese website!