The rebound of Bitcoin it’s just the beginning of a rally that will take it beyond $50,000 next year, courtesy of a process known as a halving that slows the supply of new tokens, according to cryptanalysts’ projections.
The largest digital asset is up 70% since December 31 in a partial revival from an epic defeat in 2022. While the token is currently struggling below $30,000, the halving has the potential to trigger a rally of at least 78%, according to Bloomberg Intelligence and Matrixport.
A halving, or halving, halves the number of tokens Bitcoin miners receive as a reward for their work. The quadrennial event will take place around April 2024 and is part of the process of limiting the supply of Bitcoin to 21 million tokens. The coin hit records after each of the last three halves.
Currently, the next halving is priced at 50% based on previous cycles, said Jamie Douglas Coutts, an analyst at Bloomberg Intelligence. Coutts predicts that Bitcoin can scale to $50,000 by April 2024.
“Bitcoin cycles bottom around 12-18 months before the halving and this cycle structure looks similar to previous ones, although a lot has changed, although the network is much stronger, Bitcoin has never suffered a severe and prolonged economic contraction”, they stated.
Bitcoin’s rebound has faltered of late, tempered by expectations of cooling interest rate cuts from the Federal Reserve amid persistent inflation. A US regulatory crackdown on cryptocurrencies in the wake of the November 2022 crash of the FTX exchange also threatens to darken the market outlook.
“If the FTX crash was indeed the low point of this cycle, then history would suggest that we still have roughly 350 days of ‘accumulation’ before we witness the characteristic post-halving breakout price action.”said Jacob Joseph, an analyst at CCData.
Markus Thielen, head of research at Matrixport, said in a recent note that Bitcoin will reach around $65,623 by April 2024, more than double the current price.
“Bitcoin may hit a new all-time high again in the future, however it is unlikely to see the same growth as in previous cycles due to larger market size and competition from other digital assets,” said Joseph of CCData.
Source: Ambito
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