© Reuters
The price action is currently under the influence of US Spot Bitcoin Exchange Traded Funds (ETFs) and the long-awaited rewards halving event.
Elitsa Taskova, chief product officer at Nexo, highlighted two contrasting scenarios after the halving.
In an optimistic outlook, if miners can leverage their holdings without direct selling, the price of Bitcoin could soar to $100,000 by 2024, echoing a widespread sentiment among asset managers and industry experts.
On the other hand, a less favorable condition could see Bitcoin retest support levels around $40,000, particularly if mining facilities are forced to liquidate assets to obtain operational funding.
The introduction of ETFs has been a pivotal factor, propelling Bitcoin to unprecedented heights and marking several all-time highs in a short span. However, as the ETF frenzy subsides slightly, the crypto community's focus shifts toward the halving event, which is expected to be a critical determinant of Bitcoin's future price trajectory.
That said, this upcoming halving is particularly unique because it is the first to follow an ETF-led rally in Bitcoin history. Typically, the effects of reducing mining rewards on the price of Bitcoin are seen approximately six months after the halving. However, with this new context of ETF-induced pre-growth, predictions are more speculative and navigate uncharted territories.
Overall, the halving event is expected to bring about major changes within the Bitcoin mining industry. The future direction of Bitcoin's value could establish a new price equilibrium, supporting miners amid their high energy costs, or it could trigger a liquidation to maintain operational liquidity.
Furthermore, the significant purchasing power of ETFs is expected to outweigh the usual supply-shrinking effect typically associated with halvings. As we approach a point in the market cycle where supply dynamics are increasingly affected by the actions of long-term holders, their decisions to sell or hold become critical in influencing liquidity. and market sentiment.
Reaching a record peak before the halving also introduces a novel situation, although the evolution of the cycle resembles previous patterns when aligned with the April 2021 highs.
