BTC Trades ‘Deeply Discounted’ After Halving — 5 Things to Know in Bitcoin This Week
Bitcoin (BTC) begins its first week of the new half-term struggle as bulls approach $70,000.
BTC price action could find its footing after a successful halving started the latest chapter or era in Bitcoin history.
After a week of volatility and crashes to six-week lows, Bitcoin has certainly tested traders' resolve – has the market put the worst behind it?
Analysts are playing with some familiar forces. BTC prices tend to look lower before the halving makes a dramatic comeback, but this is a play for months, not days or weeks.
However, this cycle is one of many firsts – notably a new all-time high for BTC/USD before the halving event itself takes place.
So anything is possible in 2024 as miners adapt to the new reality and Bitcoin continues to navigate a fragile geopolitical and macroeconomic landscape.
Cointelegraph takes a closer look at the key issues on the radar of Bitcoin market participants going forward in a weekly roundup of BTC price triggers.
Liquidity keeps a lid on Bitcoin's post-halving rebound.
After last week's close, BTC/USD soon pushed the stock higher with a push above $66,000 – its highest level since April 15.
Currently hovering around the $66,000 mark, according to data from Cointelegraph Markets Pro and TradingView, the pair will be a major focus for traders ahead of the first Wall Street open of the week.
Last week was marked by a sell-off in US trading hours.
Analyzing the current order book setup, Keith Allan, founder of trading resources Material Indicators, sees a lot of demand accounting above spot value.
In a post on X, he wrote, “This appears to be a fat block of BTC that may be holding liquidity to prevent GreenW from closing.
“I'm guessing if one of the 10 #BTCETF institutions put that in place to keep prices from going back to $70k before the tradfi markets open, they have an opportunity to buy the dip.”
In the absence of Wall Street, this liquidity was not available, Alan said.
“In fact, it's probably the reason they didn't throw it over the weekend. After all, if they can't afford it, there is no use for them,” he explained.
“We are expecting some volatility on Monday.”
At the time of writing data from the latest order book of the tracking resource CoinGlass, it shows Bitcoin eating through some liquidity, with the majority at $66,600.
CoinGlass also noted that despite running to weekly highs, BTC/USD did not liquidate a large number of short positions, which was only $17 million in the last 24 hours.
Next, popular trader Skew described his weekly close of $65,000 as “excellent.”
“The trend at the beginning of the week will be important for risk and BTC,” he told X followers in the latest Bitcoin update.
“The $65k-66k range is relatively tight for the HTF trend. The 4H trend leads to the top timeframe confirmations I'm thinking about today, so that's what I'm focusing on.
Analysis BTC price range before “parabolic reversal” eye
With the block subsidy now halved, market participants are speculating on how Bitcoin will react in the future – and whether it will set a new paradigm compared to previous halvings.
Chief among them is Rekt Capital, a well-known trader and analyst.
For months, analysis has suggested various BTC price “levels” with Bitcoin's previous two halvings.
As Cointelegraph reports, Bitcoin has stuck to these this year – at least to some extent – while also setting new records, such as always posting highs before a decline, not after.
Right now, Rect Capital suggests that BTC/USD is in a “regroup phase” that includes consolidation around the halving.
While this may explain the recent bullishness, they argue that the current rebounding range could serve as the perfect springboard for long-term gains.
“What if Bitcoin Announces Post-Half Restock Range Top and Bottom?” he asked on April 21.
“Then prices in this range are the best we can get before Bitcoin is finally ready for a post-half parabolic upside.”
Another post reinforced this theory. If Bitcoin gave investors an opportunity to “buy the dip” last week, they should repeat it in the coming weeks while staying in the current range.
“Any decline in BTC during the pre-investment period represents a bargain buying opportunity,” writes Rect Capital.
“Going forward, this upcoming multi-week merger represents a bargain buying opportunity.”
PCE week greets a hawkish Fed
Adding to the stimulus for volatility this week is a familiar face in the form of US macroeconomic data releases.
These are set to include first-quarter gross domestic product (GDP) and jobless claims, all up to the March publication of personal consumption expenditures (PCE) on April 26.
The latter is known to be the Federal Reserve's preferred inflation gauge, so economic policy should be watched closely as it balances between hawkish and dovish.
Risky assets continue to look for signs that interest rates will come down sooner rather than later, while recent language from Fed officials favors a “higher for longer” approach.
Unusually, central banks in Europe and the United Kingdom are poised to begin a rate-cutting cycle ahead of the Fed.
“Does PCE Inflation Data Point to Other Inflation?” Marketing Input asked Kobeisi's letter in part of an X thread covering the week's major macro events.
“All eyes will be on PCE inflation data this week, the Fed's preferred measure of inflation.”
Kobe Bryant noted that sentiment among U.S. stocks is falling sharply. A common measure of this, the Crypto Fear and Greed Index, has moved from “Greed” to “High Fear” in just a few days.
Bitcoin's relationship with stocks may return as a topic of discussion.
Bitcoin Trading Fees: “Higher for the Long Term?”
Bitcoin has made headlines for all the wrong reasons since its transaction fees were halved, surpassing a one-time record high of $200.
Thanks to the Runes event, Bitcoin miners have seen huge revenue despite a 50% drop in block grants.
Analyzing the current situation, Charles Edwards, founder of quantitative bitcoin and digital asset fund Capriole Investments, concluded that the new half-century marks a seismic shift for Bitcoin as a whole.
“Welcome to a new paradigm,” he summed up on April 22 at X.
Edwards said Bitcoin's electricity price — the “raw” price of electricity per miner — is now over $77,000.
“Bitcoin mining price reached $244k on Saturday! That's block reward + fees per Bitcoin mining. Transaction fees increased by 230+ (about 4X the previous ATH of $68 set in 2021),” he wrote.
“This means Bitcoin is trading at a deep discount.”
Edwards said that BTC/USD trading below its electricity cost is extremely rare and won't last long before rebalancing. This comes from BTC price going up, unprofitable miners shutting down and fees remaining higher than before.
“We're expecting a little bit of all three,” he predicted.
“Bitcoin's Days Below $100K Are Numbered.”
Crypto “greed” will return after clearing interest
As stocks entered a period of cold feet, crypto sentiment went the opposite way.
RELATED: BlackRock Bitcoin ETF Hits 69-Day Stream of Earnings in Half a Day on ‘4/20'
The Crypto Fear and Greed Index – the crypto counterpart of stocks' sentiment gauge – currently sits below the “super tree” zone at 73/100.
Just days ago, on April 18, the index measured 57/100, indicating that greed is off the radar.
This is not only the price recovery of BTC, but also the launch of exchanges in the form of significant liquidity reduction and open interest (OI).
As the financial analyst Tedtalksmacro wrote on April 22, this may lead to the final result, which will allow a broad market recovery.
“The market has gifted us with a beautiful reset in Bitcoin's trading position,” he predicted.
“OI's weighted funding turned negative for the first time since October 2023… That's when Bitcoin went from 27k to 46k.
The accompanying chart shows how much the landscape has changed since Bitcoin hit a high of $73,800 in mid-March.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
