Bitcoin
Was this expected? By Investing.com
Investing.com – The recent halving on April 19 has left the cryptocurrency market in uncharted territory, marked by significant price volatility, which should be considered a normal response to market dynamics, according to Daniel González, analyst at Bitso, leading cryptocurrency exchange in the world. Latin America.
This event, which halves rewards for miners, was the fourth since the creation of the Bitcoin protocol in 2009 and triggered a series of unexpected market moves, including a recent drop to $57,000 from the all-time high of $ 73,000 registered before. the half.
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The Bitso expert noted in an interview that this volatility is not surprising, given that the current halving cycle presented several differences compared to the previous ones.
Ahead of the 2024 halving, Bitcoin experienced an impressive bull rally, largely driven by the opening of Bitcoin exchange-traded funds (ETFs), which facilitated institutional investment in the cryptocurrency, he explained. This massive influx of capital helped drive the price of Bitcoin to all-time highs ahead of the reward reduction event, marking an unprecedented event in Bitcoin history.
However, after the halving, the market reaction has been different from previous cycles. Although an immediate price increase was expected due to the decrease in Bitcoin supply, there has been some silence and a decrease in enthusiasm among investors. This lack of quick recovery generated some anxiety among market participants, resulting in selling and a correction in the price of Bitcoin.
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“(Volatility) is something normal because many times people who have entered this market feel that at the moment of halving the price it has to increase instantly, but the reality is that this happens progressively, but also as this did not happen, the people saw that it was not the result, they started to panic, they started to sell, the famous ‘buy the rumors, sell the news’”, explained Gonzalez.
The macroeconomic context also influenced Bitcoin’s volatility. Recent statements by Federal Reserve Chairman Jerome Powell, maintaining interest rates and expressing concerns about inflation, have affected investor perceptions. Uncertainty surrounding traditional economic policies has led to increased interest in alternative assets such as Bitcoin, which are considered resistant to conventional monetary policies.
Regarding future prospects, Daniel González did not rule out the possibility of further readjustments in the price of Bitcoin.
Bitcoin price recorded a further drop to $61,000 on Thursday, although it is now trading around 62,489. Several factors influenced this decline, including concerns about high interest rates in the United States and increased regulatory scrutiny towards key players in the cryptocurrency sector.
Regulatory concerns are in the spotlight after it was revealed that the United States Securities and Exchange Commission (SEC) is investigating Robinhood (NASDAQ: ), Coinbase (NASDAQ: ) and , which could influence the perception of cryptocurrencies under the US law.
as the second-largest cryptocurrency, it is also under scrutiny, after the SEC delayed approving Ethereum ETFs until its investigation was complete.
Furthermore, a recent report suggests that more than 90% of transactions in stablecoins are artificial, increasing regulatory concerns surrounding this key sector of the crypto industry.
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The market also faces challenges related to the unlocking of altcoins worth nearly $2 billion in the coming weeks, which could negatively affect the altcoin market by increasing available supply.
These regulatory and supply developments occur in a context of uncertainty over high interest rates in the United States, leading traders to show a strong preference for the dollar over riskier assets such as cryptocurrencies.
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