Key Points
- Bitcoin’s price has rebounded to $71,000, showing signs of bullish continuation.
- Bitcoin halving is expected to increase mining costs and reduce annual inflation.
The price of Bitcoin (BTC) has demonstrated bullish tendencies recently, trading slightly above $71,000 during the early London session on Monday. This represents an increase of over 2% in the past 24 hours.
The price of Bitcoin is gradually moving away from a minor logarithmic downtrend, potentially leading to a rally towards a new all-time high in the near future.
Institutional Demand and Bitcoin Halving
Institutional investors’ increasing demand for Bitcoin has also contributed to the bullish sentiment. According to a weekly report from CoinShares, last week saw inflows of approximately $862 million into crypto investment products.
As of now, about 838,268 Bitcoin blocks have been mined, leaving approximately 1,738 blocks to be mined until the fourth Bitcoin halving. This has prompted Bitcoin miners to upgrade their rigs to keep up with their mining operations.
The difficulty of Bitcoin mining is expected to increase in the coming months leading up to the halving event.
Data from CryptoQuant indicates that the cost of Bitcoin mining is expected to double to $80k by the end of this month for the most commonly used miners, S19 XP. For example, Bhutan’s investment arm, Druk Holdings & Investments, and Bitdeer Technologies Group announced plans last week to increase the country’s Bitcoin mining capacity sixfold to 600 megawatts by early next year.
Bitcoin’s Appeal and Price Expectations
The halving of Bitcoin will make the coin more attractive to institutional investors and hedge fund managers. This is especially true as many investors are moving away from the inflationary fiat market and the underperforming stock industry. The Bitcoin halving will also reduce the annual inflation rate from 1.68% to about 0.84%.
In the past five weeks, the price of Bitcoin has been forming a bullish pennant pattern on the daily time frame. With Monday’s bullish breakout from a falling logarithmic trend in the four-hour time frame, it appears that the bulls are taking control.
According to a technical analysis by popular crypto analyst Ali Martinez, the Bitcoin price could hit $85k if it consistently closes above $71K in the coming days.
Bitcoin’s dominance is on the verge of a reversal after reaching a psychological resistance of around 54%. With Gold and Silver scaling in price discovery mode, most experts are confident of a super cycle ahead.
As the price of Bitcoin continues to climb, popular crypto analyst Michaël van de Poppe has noted that the rotation of crypto cash towards altcoins will likely continue in the coming weeks. Furthermore, altcoins have a higher return-to-risk ratio, particularly in light of the significant adoption of web3 products and the tokenization of real-world assets.
