Key Points
- The fourth Bitcoin halving is expected in about a month, with Coinbase advising caution due to changing market dynamics.
- Analysts warn of a potential “Danger Zone” for Bitcoin ahead of the halving, based on historical price retracements.
The top cryptocurrency exchange, Coinbase, has alerted the crypto community about the upcoming fourth Bitcoin halving, which is predicted to occur in about 33 days. The exchange has urged caution, stating that conclusions should not be drawn solely based on previous halving cycles.
Coinbase emphasizes the importance of careful analysis of historical patterns in light of the ever-evolving cryptocurrency market and the growing influence of spot Bitcoin ETFs.
Impact of Spot Bitcoin ETFs
The exchange elaborates on the considerable influence of US spot Bitcoin ETFs in altering Bitcoin’s market dynamics and creating a new demand anchor. This shift signifies a departure from previous cycles, indicating that the current cycle possesses unique characteristics and consequences.
Coinbase is optimistic about the ongoing price trend. The exchange perceives the current price movement as just the beginning of a more extended bull run. According to Coinbase, further appreciation of the Bitcoin price will be required to balance supply-demand dynamics.
Last week, Bitcoin’s price soared to a record high of over $73,000. However, it has since experienced some volatility due to global macro developments. Over the past weekend, Bitcoin’s price dipped below $65,000 but quickly rebounded to $68,000.
The impending halving event on the Bitcoin network presents both challenges and opportunities for miners. While the halving event reduces block rewards, potential factors such as the rise in Bitcoin’s price and increased transaction fees could help mitigate revenue losses.
Approaching the “Danger Zone”
The Bitcoin price has already experienced a significant increase ahead of next month’s Bitcoin halving. After a massive rally of over 50% so far in 2024, analysts advise investors to exercise caution when establishing new positions.
Bitcoin is reportedly on the brink of entering what analysts refer to as the “Danger Zone”, just days before its halving event. This phenomenon was highlighted by Crypto analyst Rekt Capital in a recent post on March 17.
Historically, Bitcoin has experienced price retracements 14 to 28 days before its halving, as noted by Rekt Capital. In 2016, the cryptocurrency’s price dipped by 40% during this period, followed by a 20% decline in 2020.
Earlier in January, Rekt Capital predicted a “pre-halving rally” about 60 days before the halving, followed by a subsequent “pre-halving retrace” one to three weeks before the event. This forecast proved accurate as Bitcoin surged in mid-February, surpassing its previous all-time high from the previous cycle of $68,990.
However, some market veterans remain bullish about Bitcoin. During a recent event in Bangkok on March 17, Binance CEO Richard Teng expressed his optimistic outlook on Bitcoin. Teng anticipates that the cryptocurrency will exceed $80,000 by the end of the year.
He further stressed that Bitcoin’s journey is just beginning, attributing its upward trend to significant investments by institutional players, especially through the newly launched Bitcoin ETFs in the US. These ETFs currently manage an astonishing $57 billion, according to data from Dune Analytics.
While expressing confidence in Bitcoin’s potential to surpass $80,000, Teng warned that the journey will not be without fluctuations. He noted that despite supply constraints and sustained demand, price fluctuations are inevitable along the way.
