Many forecasts were circulating up until yesterday suggesting that before the halving, the price of Bitcoin might have hit new all-time highs.
But after yesterday, this prediction doesn't seem as plausible.
The decrease in Bitcoin prices despite pre-halving forecasts
Bitcoin's price fell after hitting an all-time high of $73,800 on March 14.
It had rebounded to approximately $60,000 after a week or so of adjustment, but it bounced again and continued to rise to $63,000. The price of Bitcoin actually fluctuated for around ten days around the $65,000 reference level throughout that correction.
The price bounced back to roughly $70,000 on March 24, marking the end of the downturn, and stayed there for approximately a week. It ended yesterday, this little bout of sideways movement around $70,000.
The US stock markets' reopening following the weekend marked the beginning of the downturn, which was mostly followed by their own decline.
Nevertheless, it appears that a fresh correction has begun for the price of Bitcoin, even though the decline in the US stock markets was fairly confined.
Bitcoin's price unexpectedly fell below $67,000 tonight, despite the Asian stock markets' strong performance.
Even if yesterday's decline in the US stock market looks to have been the catalyst for this 4.5% decline in less than a day, it does not appear to be the result of the overall trend of the financial markets.
Why is this happening?
The possibility of a Middle East conflict escalating as a result of Israel's attack on Iran in Syria may have contributed to yesterday's decline in financial markets.
The issue is that while neither Syria nor Israel are significant oil exporters, Iran is, and this accounts for a large portion of the oil consumed in the West.
There's a chance that less exports will result in higher oil prices and hence higher inflation. In fact, until a few days ago, the markets were certain that the Fed would begin reducing interest rates in June. However, since then, there has been some deterioration in this possibility, to the point where the markets are now more focused on July.
The liquidity of the financial markets affects the price of Bitcoin, and if interest rates are not lowered, this liquidity will continue to decline.
Yet, during the course of the night, there have been some concerns raised about Binance, the biggest cryptocurrency exchange in the world.
The surge in miners' profits
It is expected that on April 20 and 21, there will be a halving of Bitcoin. It will entail cutting the miners' payment in half, which casts doubt on how long some miners can continue to operate.
instance, Marathon Digital Holdings lost more than 4% and Riot Platforms lost more than 6% in a single session on the stock exchange yesterday.
In spite of concerns about their viability following the slashing, fees are currently enabling them to report high earnings. For each block that is mined, the reward is still set at 6.25 BTC, but the transaction fees have gone up.
Rather, from $4 at the end of February to $16 at the beginning of March, the average transaction fees have risen, staying above $6 until the middle of the month. They started to decline on March 17th, but they are still higher than $4. Because of the new all-time high price of Bitcoin in March, miners were able to record collecting $2 billion in total in a single month. The last time they had gathered so much was in 2021.
It is noteworthy, nevertheless, that awards accounted for the majority of this earnings, while fees made up "only" 86 million dollars of the total.
April 2024, Cryptoniteuae