Bitcoin (BTC) Price Analysis and Prediction: A Supply Shock Is Coming

Bitcoin (BTC), the world's oldest and most valued cryptocurrency, fell below $59,000 over the weekend due to weak buyer activity. However, experts are predicting a significant supply shock that could push prices higher.

Bitcoin (BTC) dropped below $59,000 on March 26 as weak buyer activity capped gains over the weekend, but a “supply shock” is still expected to drive prices higher.

Bitcoin price fell to $58,780 on Bitstamp as of 00:34 ET (04:34 UTC). The world’s largest cryptocurrency lost 1.3% over the past 24 hours and slipped nearly 7% to date.

Meanwhile, the top cryptocurrency’s past performance showed that after each halving event, the price of Bitcoin saw substantial increases due to a heavy demand for Bitcoin amid decreased supply. As Bitcoin’s production rate has been cut in half, this time won’t be any different. A #Bitcoin supply shock is coming.

Coming out of the halving, Bitcoin ETFs are absorbing the market’s available BTC. This week alone, Bitcoin ETFs recorded nearly $13 million in net inflows, highlighting strong institutional interest in the cryptocurrency.

Moreover, mining competition is set to intensify as the halving reduces the number of Bitcoins that miners receive, pushing less efficient operations out.

Bitcoin halving in a nutshell:

– Mining competition increases as less BTC is paid out to miners, pushing out weaker operations.

– Halving the production rate exacerbates the supply-demand imbalance, especially with U.S. Bitcoin ETFs showing higher demand than daily supply even before the halving.

– Major institutional players, including U.S. ETFs (e.g., BlackRock, Fidelity) and those in Hong Kong, are accumulating Bitcoin at a rate that exceeds daily production, bringing more capital into the market and increasing demand.

Bitcoin price is currently seeing a period of relative consolidation, hovering near the $58,000 to $60,000 range. This pause in Bitcoin’s price movement has led to speculation about where BTC will trend in the short-term.

If BTC rises to the 61.8% Fibonacci retracement level at $62,066, it may encounter resistance. This level aligns with a previously breached trendline and the 100-day Exponential Moving Average at around $62,226, creating a key resistance zone.

If BTC fails to break through $62,066, it could drop to $57,115 and potentially fall further by 19% to test the daily support level at $49,917.

However, the Moving Average Convergence Divergence (MACD) indicator is showing a bullish trend, which suggests that Bitcoin might continue to climb.

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