Expectations and challenges: Bitcoin prices digesting the halving avent

The halving event and strong technical support support the ‘buying the dips’ strategy in Bitcoin, which is trading Monday morning at $66,139, affecting other cryptocurrencies as well.

The halving event occurred last Saturday night. The technical picture now indicates that Bitcoin against the dollar is successfully holding within a corrective pattern, finding support at dips to the 61.8% Fibonacci retracement level from the January lows.

Additionally, the cryptocurrency market relatively quickly absorbed the selling pressure that swept through the markets following the Israeli attack on Iran.

Digital market transactions rose by 4.7% in 24 hours to $2.33 trillion, but this is less than $2.62 trillion seven days ago.
In my view, the bullish opportunities for Bitcoin are not as strong as they were earlier in the month, as the 50-day moving average acts as resistance.

A strong rise above $67,000 is needed to overcome this strong bearish signal even after the halving event.
Bitcoin’s price remains in the buying peak zone even after halving based on futures contracts’ open interest analysis. Historically, significant gains occur after halving, around 6 to 18 months later, and major price changes become less likely with increasing market volume.

So, I believe the current halving cycle is no different from previous ones. Bitcoin is expected to reach its peak at $100,000 by the end of 2024 and $150,000 next year.

Bitcoin transaction fees rose due to user activity in anticipation of the Runes launch, a new symbolic standard on the BTC blockchain. The average fee exceeded $16, marking the anticipated fourth halving event shortly after 8:09 PM GMT on Friday. Bitcoin was traded steadily following the halving, settling at around $63,000.

It is worth mentioning that after the halving event, the rate of new Bitcoin issuance and the rewards for successful Bitcoin miners are halved. There cannot be more than 21 million bitcoins in the world, and the fewer new distinctive tokens entering circulation may affect Bitcoin prices. For this reason, the halving process is closely monitored by miners and investors alike.

In my opinion, after this important event, the rate of new bitcoins created every approximately 10 minutes is 3.125. This halving occurs after verifying the validity of every 210,000 blocks, or approximately every four years, and is integrated into the network design originally launched in January 2009.

In the past, halving led Bitcoin to reach its all-time highs in the months following the events. But I believe this time is different, as Bitcoin’s price already reached a new record level in the months preceding the halving. Most of the recent rise was driven by the approval of exchange-traded funds (ETFs), which may indicate that demand from this market could have a greater impact on Bitcoin prices than halving events.

In my view, there is an additional degree of symbolism associated with this halving in terms of clarifying monetary policy, geopolitical factors, and regulation for Bitcoin as people look to their traditional currencies amid high inflation, interest rates, and the economic environment they live in, seeing Bitcoin as an alternative currency.

Therefore, it is likely that the impact of this halving is largely reflected in current Bitcoin prices, and there is unlikely to be a significant price surge thereafter. Thus, the effects of halving may be limited in the short term in the Bitcoin mining sector, where integration with a decrease in overall retail rates due to reduced profitability could occur.

In my view, even if the halving does not lead to a significant price increase, increasing revenues for miners will come from increased total transaction fees driven by recent developments such as Ordinals and other Layer 2 networks.