Several analysts predict that the price of Bitcoin will reach new all-time highs before the next halving.
Massive inflows into Bitcoin ETFs and the approaching fourth halving of the network are driving the price of Bitcoin in the market.
The leading cryptocurrency broke the $65.000 barrier, at a time when Bitcoin exchange-traded funds are seeing record inflows and with less than 50 days to go until the arrival of the fourth halving the Bitcoin, a historic event that will halve the current BTC issuance.
Bitcoin price is trading at around $65.000
At the time of writing this article, the price of Bitcoin is trading on the market at around $65.100 dollars, according to data from CoinMarketCap. The platform shows that the cryptocurrency has gained around 5,5% in the last few hours and 27% in the last week, driven by increased inflows and record trading volume in spot ETFs.
Recently, Bitcoin exchange-traded funds saw record trading volumes of between $2.400 billion and $7.700 billion per day. Also, weekly volume for Bitcoin ETFs reached $22.000 billion, according to the report. expressed ETF analyst Eric Balchunas on his X account (formerly Twitter).
Source: CoinMarketCap
Again, Balchunas commented that it is unclear whether these trading volumes are the “new normal” in the BTC-based spot ETF market or whether it is just a move driven by the prospects of the halving.
Crypto market analyst Rekt Capital believes that the current rally in Bitcoin price is driven by the proximity of the network halving.
The phases of halving
In his X account, the crypto analyst explained that there are 4 pre-halving phases that are reflected in the price of BitcoinThe first of these, which he called “Pre-Halving Rally”, tends to raise the price of BTC, due to the demand that the cryptocurrency experiences from investors and traders, who seek to profit from the hype about this important event.
Then a second phase called “Final Pre-Halving Retrace”, comes with the correction of the Bitcoin price, a few days before the halving. According to the analyst, in 2020, the price of the cryptocurrency corrected by 20% before the arrival of the Bitcoin miners' block reward halving event. This downward correction has historically been driven by the sale of BTC among investors and traders looking to profit from the halving.
A third phase of the Bitcoin halving, “Post-Halving Re-Accumulation”, is characterized by low volatility in the price of Bitcoin, which tends to remain stable over a period of approximately 150 days or 5 months. According to Rekt Capital, at this stage, many short-term investors become disappointed due to “boredom, impatience and despair over the lack of significant results” in their investment in BTC. However, after the reaccumulation phase, the price of Bitcoin tends to break upwards.
Rekt highlighted that in the fourth phase of the halving, “Post-Halving Parabolic Uptrend”, the price of BTC has historically experienced a strong upward trend, which has led it to surpass its all-time highs.
While the analysis made by Rekt Capital is based on the behavior of the cryptocurrency in the previous halvings, in 2016 and 2020, other analysts consider that The current Bitcoin cycle is different and that the cryptocurrency is about to break its previous ATH.
The importance of spot ETFs in the current BTC rally
Bitcoin ETFs play a key role in the remarkable growth that the cryptocurrency is experiencing in the market. Net inflows into these financial instruments, especially BlackRock’s iShares Bitcoin Trust (IBIT), have a positive impact on their price, reflecting the great interest of investors in BTC. Recently, IBIT reached $10.000 billion in assets under management (AUM), just two months after its launch in the US market. This is a great milestone, considering that the gold ETF, a highly sought-after option for traditional investors, took 2 years to reach this figure.
Finally, with a price of $65.100 dollars per unit, Bitcoin has set a new all-time high in its market capitalization, which amounts to $1,28 trillion. As explained by this media, its previous all-time high in market capitalization was set in November 2021, with a total value of $1,27 trillion.
Continue reading: Bitcoin Market Cap Nears New All-Time Highs
