Bitcoin (BTC) has experienced a decline of approximately 19% since reaching its all-time high (ATH) on March 14, 2024. This condition raises concerns about the longevity of the current bull market.
However, despite the recent correction, many analysts believe that this represents a healthy consolidation within the ongoing bull market and not its end.
Bitcoin correction signals market health, not end of bull run
On-chain data platform Santiment reports a change in market sentiment. Data shows that mentions of “bull market/cycle” have increased since the end of March. Additionally, there is a decrease in FOMO sentiment (fear of missing out) and an increase in FUD sentiment (fear, uncertainty, and doubt).
However, prices have historically moved contrary to the prevailing sentiment of the masses. Therefore, there is a possibility of a recovery before or shortly after the upcoming Bitcoin halving.
Read more: What happened at the last Bitcoin halving? Predictions for 2024
Comparing mentions of bull market/cycle and bear market/cycle. Source: Santiment
The rise in “bull market/cycle” mentions is consistent with Bitcoin’s current price action. At the time of writing, Bitcoin is trading at $61,988.
Interestingly, the Bitcoin price drop contradicts the typical narrative surrounding the Bitcoin halving. The event, which takes place every four years, has always been associated with rising BTC prices. Bitcoin's upcoming halving is scheduled for a block height of 840,000, around April 20, 2024.
Many experts believe that the Bitcoin halving this year could potentially change the typical price increase of BTC. This prediction is particularly due to the recent approval of US spot Bitcoin ETFs.
Nevertheless, analysts consider the current correction to be a healthy move. Crypto analyst CryptoCon emphasized the need for corrections, even within a bull market. It identifies the 20-week EMA at $55,600 as a key support level for Bitcoin.
“As long as Bitcoin continues to retest this moving average, we could see a nice smooth curve to the upside like 2017,” he explained.
The renowned analyst PlanB also maintains an optimistic long-term outlook for Bitcoin.
“[In my opinion]this Bitcoin halving will be no different… BTC peak will be above $300,000 in 2025,” PlanB said.
Echoing Plan B and CryptoCon, Hannah Phung, lead data analyst at Spot On Chain, explained that price increases typically occur around 6 to 12 months after the halving.
The experts' opinion is consistent with Bitcoin's historical data. After the first halving in November 2012, the price rose from around $12 to over $1,000 by the end of 2013. Similarly, during the second halving in July 2016, the price of Bitcoin rose from around $650 to almost $20,000 US dollar in December 2017. The third halving occurred in May 2020, resulting in a price increase from around $8,000 to $69,000 by November 2021.
Read more: Bitcoin Halving Countdown
Bitcoin halving countdown. Source: BeInCrypto
Despite the positive outlook for Bitcoin price in the long term, the Bitcoin halving could continue to cause concern for miners. This year's halving will reduce the reward for mining a Bitcoin block from 6.25 to 3,125 BTC, significantly impacting miner profitability. As a result, miners are under pressure to innovate and find ways to reduce costs while maintaining or increasing their Bitcoin production.
While this event may impact miners' profitability, a January 2024 study by CoinShares shows that some miners can survive. In fact, miners with significant Bitcoin holdings and stronger capitalization tend to perform better in bullish markets.
However, those with limited cash reserves and high operating costs per BTC are more vulnerable to the Bitcoin price decline.
The recent correction, the upcoming halving, and newly approved US spot ETFs create a complex environment for Bitcoin price predictions. But overall, long-term bullish sentiment remains strong among most industry experts.
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