Investing.com – The recent halving on April 19 left the crypto market in uncharted territory, marked by significant price volatility, which should be considered a normal response to market dynamics, according to Daniel González, analyst at Bitso, the leading cryptocurrency exchange in Latin America.
This event, which halves rewards for miners, has been the fourth since the creation of the Bitcoin protocol in 2009 and has triggered a series of unexpected moves in the market, including a recent drop to $57,000 from the all-time high of $73,000 recorded before. the reduction by half.
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The Bitso expert pointed out in an interview that this volatility is not surprising, given that the current halving cycle has presented several differences compared to previous ones.
Ahead of the 2024 halving, Bitcoin experienced an impressive bullish rally, driven largely by the opening of Bitcoin exchange-traded funds (ETFs), which facilitated institutional investment in the cryptocurrency, he explained. This massive influx of capital helped push the price of Bitcoin to all-time highs ahead of the reward reduction event, marking an unprecedented event in Bitcoin history.
However, after the halving, the market reaction has been different from that of previous cycles. Although an immediate price increase was expected due to the decreasing supply of Bitcoin, there has been some silence and a decrease in enthusiasm among investors. This lack of a quick rebound has created some anxiety among market participants, resulting in selling and a correction in the price of Bitcoin.
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“(Volatility) is something normal because many times people who are entering this market feel that when the price is halved it has to increase instantly, but the reality is that it happens progressively, but also since this did not happen , people “They see that it was not the result, they panic, they start to sell, the famous 'buy the rumors, sell the news,'” González explained.
The macroeconomic context has also influenced the volatility of Bitcoin. Federal Reserve Chairman Jerome Powell's recent statements holding interest rates and expressing concern about inflation have affected investor sentiment. The uncertainty surrounding traditional economic policies has led to increased interest in alternative assets such as Bitcoin, perceived as resistant to conventional monetary policies.
Regarding future prospects, Daniel González did not rule out the possibility of a further adjustment in the price of Bitcoin.
The price of Bitcoin recorded a further drop to $61,000 on Thursday, although it is now trading around $62,489. Several factors have influenced this drop, including concerns about high interest rates in the United States and increased regulatory scrutiny towards major players in the crypto sector.
Regulatory concerns are in the spotlight, after it was revealed that the United States Securities and Exchange Commission (SEC) is investigating Robinhood (NASDAQ:), Coinbase (NASDAQ:) and, which could influence perception of cryptocurrencies under US law.
As the second-largest cryptocurrency, it is also under scrutiny, after the SEC postponed approval of Ethereum ETFs until it concludes its investigation.
Additionally, a recent report suggests that over 90% of stablecoin transactions are artificial, raising regulatory concerns around this key sector of the crypto industry.
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The market also faces challenges related to the unlocking of nearly $2 billion worth of altcoins in the coming weeks, which could negatively impact the altcoin market by increasing available supply.
These regulatory and supply developments occur in a context of uncertainty about high interest rates in the United States, which leads traders to show a strong preference for the dollar over higher risk assets such as cryptocurrencies.
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