Bitcoin surges to $71,000 pre-halving, led by significant accumulation and investor optimism.
Bitcoin has experienced a notable rebound, regaining its value to touch $71,000 in the recent trading surge on March 25. This movement comes as a potential end to the pre-halving retracement period, marked by a significant accumulation day that caught many traders by surprise. On this day, Bitcoin witnessed a considerable uptick in its accumulation rates, hinting at a positive momentum ahead of its forthcoming halving event.
Accumulation Surge Sparks Optimism
A recent analysis by blockchain analytics firm Santiment highlighted an unexpected surge in Bitcoin accumulation. Over the weekend, a significant volume of Bitcoin, precisely 51,959 BTC valued at approximately $3.4 billion, found its way into the wallets of major stakeholders. These “sharks” and “whales,” as referred to by Santiment, hold between 10 and 10,000 Bitcoin coins each. This movement represents a substantial 0.263% of Bitcoin’s total available supply being scooped up in a single day, signaling strong investor confidence.
Bitcoin Accumulation. Source: Santiment
With the Bitcoin halving event just around the corner, expected to occur around April 19, this accumulation trend could have a lasting impact on the cryptocurrency’s market cap. Analysts initially feared a deeper retracement akin to past pre-halving periods. However, Bitcoin’s price only dipped 17% from its March 14 peak of $73,738 to $61,494 on March 20, showcasing a resilience that parallels the pre-halving retrace in 2020.
Market Dynamics and Future Outlook
The recent market dynamics, characterized by Bitcoin’s swift recovery, suggest a potential stabilization and optimism in the crypto market. Analysts, including Rekt Capital, observe that the current retrace closely mirrors the 2020 pre-halving period in terms of depth and duration. Such patterns bolster the anticipation of a bullish trend as the halving event approaches.
<blockquote class=”twitter-tweet”><p lang=”en” dir=”ltr”><a href=”https://twitter.com/hashtag/BTC?src=hash&ref_src=twsrc%5Etfw”>#BTC</a> <br><br>If this ends up being the end of the Pre-Halving Retrace…<br><br>Then Bitcoin will have almost equalled the 2020 Pre-Halving Retrace<br><br>Bitcoin pulled back -18% in this cycle whereas BTC retraced just over -19% in 2020<a href=”https://twitter.com/search?q=%24BTC&src=ctag&ref_src=twsrc%5Etfw”>$BTC</a> <a href=”https://twitter.com/hashtag/Crypto?src=hash&ref_src=twsrc%5Etfw”>#Crypto</a> <a href=”https://twitter.com/hashtag/Bitcoin?src=hash&ref_src=twsrc%5Etfw”>#Bitcoin</a> <a href=”https://t.co/a6G92JbbmY”>pic.twitter.com/a6G92JbbmY</a></p>— Rekt Capital (@rektcapital) <a href=”https://twitter.com/rektcapital/status/1772312904404005336?ref_src=twsrc%5Etfw”>March 25, 2024</a></blockquote> <script async src=”https://platform.twitter.com/widgets.js” charset=”utf-8″></script>
Crypto research firm Kaiko delved into the volatility and selling patterns following the U.S. market close last week, shedding light on the fragmented liquidity across different exchanges and trading pairs. Despite these challenges, Bitcoin managed to surge by 5.2% on the day, briefly hitting the $71,000 mark in late trading on March 25.
Data from Farside Investors reveals that these ETFs saw an exodus of $836 million in a short span from March 18 to March 21, raising questions about investor confidence and the future of Bitcoin, especially with its halving event on the horizon in April—a first in its history to precede rather than follow a record high.
Expert Analysis and Trading Advice
The insights of three seasoned traders offer valuable perspectives and strategies for navigating the Bitcoin market. Lucas Kiely, Chief Investment Officer at Yield App, emphasizes the correlation between Bitcoin’s price movements and the broader equity market. He identifies specific times during the trading day when liquidity and price volatility peak, suggesting these as optimal windows for trading. Kiely advises traders to leverage equity market liquidity surges to their advantage, employing a fast-paced momentum strategy that focuses on buying during downturns, selling in strength periods, and maintaining strict stop-loss orders. This approach, he claims, has enabled him to outperform Bitcoin’s monthly returns by 10%.
Michael van de Poppe, the CEO of MN Trading Consultancy, provides a broader market analysis. He attributes recent investment pullbacks to precautionary shifts ahead of Federal Reserve meetings and interest rate adjustments by the Bank of Japan. Despite these short-term market reactions, van de Poppe sees no long-term impact on the market from these events, suggesting that the initial purchasers of Bitcoin ETFs are likely to be long-term investors. His strategy is contrarian; he advises buying Bitcoin during price dips to capitalize on corrections ranging from 15-40% as a means to prepare for the next bull market cycle.
Chris Newhouse, a DeFi analyst at Cumberland Labs, brings a different perspective, focusing on the ETF buyers’ understanding of volatility. He distinguishes between investors driven by fear of missing out (FOMO) and those with a long-term investment vision. Additionally, Newhouse highlights the importance of strategy in investment decisions, recommending “stink bids” as a tactic for capitalizing on quick market recoveries from dips. He views the consistent institutional and retail demand, including for memecoins, as a sign of a strong underlying bid across the cryptocurrency spectrum, suggesting a market sentiment that favors buying on dips unless significant negative trends emerge.