The crypto community is abuzz with anticipation as Bitcoin’s next halving event, scheduled for around April 2024, is expected to trigger a substantial rally, potentially pushing the digital asset beyond the $50,000 mark.
After a 67% increase since January 1st, Bitcoin is currently hovering around the $27,000 level, following a tumultuous year in 2022. Bloomberg Intelligence and Matrixport analysts suggest that the upcoming halving could ignite an 81% surge in value.
The Halving Effect: Curbing Supply and Boosting Value
The halving event, which occurs every four years, slashes the rewards that Bitcoin miners receive for their efforts by 50%. This process is designed to cap the total number of Bitcoin tokens at 21 million. Historically, the cryptocurrency has reached new heights after each of its three previous halvings.
Jamie Douglas Coutts, a Bloomberg Intelligence analyst, estimates that the impending halving is already 50% priced in based on previous cycles.
He predicts that Bitcoin could surpass $50,000 by April 2024. Coutts also notes that Bitcoin cycles typically bottom out 12-18 months before a halving event, and the current cycle follows a similar trajectory.
Challenges Ahead: Market Pressures and Regulatory Crackdowns
Despite the optimistic outlook, Bitcoin’s recent rally has been somewhat stalled, hindered by dwindling expectations of Federal Reserve interest-rate cuts and ongoing inflation concerns. Additionally, the fallout from the FTX exchange collapse in November 2022 and potential regulatory clampdowns on crypto pose further challenges to the market.
Jacob Joseph, an analyst at CCData, suggests that if the FTX collapse marked the low point of this cycle, there may be roughly 350 days of “accumulation” left before the post-halving breakout occurs. Meanwhile, Matrixport’s research head, Markus Thielen, predicts that Bitcoin could reach around $65,623 by April 2024, more than doubling its current value.
Competition and Market Dynamics
Bitcoin is still significantly below its all-time high of nearly $69,000, which was achieved in November 2021, 18 months after the 2020 halving. Last year’s crypto market crash was fueled by central banks raising interest rates to curb inflation and the implosion of several digital asset companies.
CCData’s Joseph cautions that Bitcoin’s future growth may not match previous cycles, as the increased market size and competition from other digital assets could limit its potential. Bitcoin’s price must overcome several key hurdles, including the 20-day exponential moving average (EMA) and the 50-day simple moving average (SMA), before a strong recovery can begin. At the time of writing, Bitcoin was valued at $27,686.
Source: https://coinpedia.org/bitcoin/bitcoin-halving-sparks-frenzy-experts-predict-btc-price-to-hit-50k-and-beyond/