2024-5-3 16:36 |
Despite the excitement surrounding the recent halving in the cryptocurrency market, Bitcoin may be entering a period of price stabilization that could last up to two months, according to market analysts at Bitfinex.
The report suggests that Bitcoin will continue to set the pace for the cryptocurrency market through May and remain a critical indicator of the sector’s overall market cap.
Bitcoin Price Action Will SlowdownBitfinex analysts emphasize that consumers and businesses are now more informed about the economic foundations influencing market trends, unlike previous cycles.
This knowledge could lead to a one to two-month consolidation phase for Bitcoin. As a result, prices could fluctuate, potentially reaching up to $10,000 in either direction.
“Bitcoin has historically retraced in the initial weeks after previous halvings, with a few months needed for the new supply issuance to be reflected by its price. In this instance, it could be argued that Bitcoin’s price stability depends on investors’ conviction of the asset and their reluctance to sell,” Andrey Stoychev, Head of Prime Brokerage at Nexo, told BeInCrypto.
Moreover, the anticipated stagnation follows Bitcoin’s peak market dominance. It seems to wane as liquidity shifts towards altcoins.
This shift is also attributed to the halving reduction of the new BTC supply. It historically boosts investor risk appetite and diverts attention toward altcoins.
“The 57 percent level in BTC.D represents a significant technical and psychological benchmark based on historical data. Once Bitcoin dominance reaches this level, it tends to experience a sharp rejection indicating a shift in market sentiment and capital flow from Bitcoin to altcoins. Following last week’s halving, we saw BTC.D reach 57 percent and then fall sharply through it,” Bitfinex analysts wrote.
Read more: Bitcoin Halving History: Everything You Need To Know
Bitcoin (BTC) Dominance. Source: TradingViewMoreover, market specialists are watching Bitcoin derivatives closely. The reduced implied volatility seen recently suggests a quieter summer ahead for Bitcoin.
“Summers are usually low volatility periods, and traders are starting to position accordingly based on their bias,” Jag Kooner, Bitfinex Head of Derivatives, said.
Read more: Bitcoin Price Prediction 2024/2025/2030
As the market adjusts to the halving and economic signals, investors are advised to monitor these developments closely. They must keep an eye on shifts in liquidity and market sentiment that could dictate the pace for the remainder of the year.
The post Bitcoin Price Could Remain Stagnant for 2 Months: Report appeared first on BeInCrypto.
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