Over the weekend, Bitcoin price dropped by about 8% following the Iran-Israel war tension. BTC was already struggling to break out at $70,000 aiming at its all-time high of $73,000. However, the bears have been prevailing pushing the price as low as $60,000. Bitcoin halving, a special event in the cryptocurrency community is approaching fast, expected to take place on April 20, 2024. As BTC price has made a slight rebound, will it take an upside path to full price recovery?

Bitcoin Price Market Performance

The recent market trends for Bitcoin have been demonstrated by both resilience and volatility. The price of BTC soared by 2.5% over the past day, reaching approximately $66,436.53. Its price has rebounded amidst escalating market instability because of increased political tension in the Middle East. 

Over the past week, Bitcoin witnessed a decrease in its value. The trend is noticed in a more extended period in which BTC experienced a slight decline of 2.84% in its growth.  Its current market capitalization sits at approximately $1.31 trillion, a significant value that demonstrates the dominant position of the coin in the crypto market, according to CoinMarketCap. 

The proportion of volume to market capitalization of BTC is a notable aspect, standing at 3.31%. This ratio highlights the trading activity and liquidity of Bitcoin relative to its overall market value. Since the coin has a capped circulating supply of 19.68 million BTC out of a total supply of 21 million BTC, there could be a continuation of its scarcity, thereby influencing prices in the long term. 

Bitcoin hit its all-time high of $73,750 a month ago on March 14, 2024, but its price has since retraced by approximately 11.74%. This sharp decline from its peak shows the extent of the impact of external events on its value.

Factors Affecting the Rise of Bitcoin Price

It is not easy to perfectly predict the price movement of Bitcoin, because of many factors that influence it. Technological changes, macroeconomic trends, geopolitical events, and regulatory developments, among others, affect BTC’s future prices. The price of Bitcoin is volatile by nature, and can also be affected by other factors such as market sentiment and events. 

1. Bitcoin Halving Effect on BTC Price

The fourth Bitcoin halving is expected to take place in about 5 days. According to history, the event tends to positively impact the price of Bitcoin. This is because the rate at which new coins are mined is decreased, thereby, reducing the supply, and potentially increasing the coin’s demand. This may result in BTC prices soaring or remaining constant 

However, it is not certain that the price will take this path. Previous events recorded an increase in Bitcoin prices, but it was not always instant. The impact of halving may not be immediate and could take several weeks or even months to materialize. This is because each halving has its own market conditions and unique context. 

Market analyst Markus Thielen predicts a large outflow of Bitcoin from miners after the upcoming halving, potentially liquidating $5 billion worth of BTC over four to six months. This could lead to sideways movement in Bitcoin prices, as seen after past halvings. Thielen also anticipates a significant impact on altcoins, with a delay in their rally compared to Bitcoin.

#Bitcoin Might Trade Sideways for 6 months As Miners Could Sell $5bn of BTC -> Here is why: https://t.co/gLRgs8yyGg pic.twitter.com/zBLdV95MAl

— 10x Research (@10x_Research) April 13, 2024

Marathon, the largest Bitcoin miner, is expected to gradually sell off its inventory post-halving to avoid a revenue drop. If all miners adopt a similar strategy, up to $104 million worth of BTC could be sold daily, potentially reversing the supply/demand imbalance. Marathon CEO Peter Thiel believes a break-even rate of $46,000 per BTC will be necessary to remain profitable post-halving, indicating little price movement in the six months following the halving event. 

2. Geopolitical Tension

Political conflicts can potentially have a great impact on the price movement of Bitcoin and other cryptocurrencies. The ongoing political tensions between Iran and Israel have led to a rise in market volatility, thereby affecting Bitcoin and altcoin prices. When geopolitical conflict surfaces, fear and uncertainty in the market emerge, resulting in a cautious approach by investors. This could lead to a decrease in prices across various types of assets, such as cryptocurrencies. 

In this case specifically, the significant decline of 8.4% in Bitcoin value that occurred after the strike of Iran on Israel shows the reaction of the crypto market. Investors might move away from more risky assets such as cryptocurrencies, looking for safe haven in government bonds or gold. 

Should the dispute widen and tension keeps increasing, the value of Bitcoin and altcoins will continue to be affected. The situation could lead to increased volatility in the crypto market. On the other hand, should the tension subsidize and the situation stabilizes, Bitcoin price and those of other digital assets might increase. 

Conclusion

The current perofrmanceof Bitcoin shows how various factors interact to affect its market value. The slight increase in the cryptocurrency’s value after a period of decline shows a possibility of recovery, but the continuing geopolitical tensions and upcoming halving events create instability in the market. Even though the halving event has typically caused prices to rise because of its effects on supply, the geopolitical situation may result in increased unpredictability. Careful and thorough research should be conducted before making any investment decisions. It is crucial to keep in mind risk tolerance and investment goals. The future of Bitcoin’s price movement is generally influenced by both anticipated and unexpected factors. 

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Filed under: News - @ January 1, 1970 12:00 am