Gushiken Yona
March’s promising bullish momentum in the cryptocurrency market seems to have lost its steam, as Bitcoin embarks on a downward trend at the onset of April. Despite the positive strides and upward trajectory witnessed throughout March, Bitcoin’s recent performance indicates a shift in market sentiment and trading dynamics as the new month unfolds.
The current month started Monday with Bitcoin, the world’s largest crypto asset by market cap and several other cryptocurrencies experiencing a decline, breaching crucial support levels in what appeared to be a result of reduced market liquidity during the extended Easter weekend. While this downturn did not seem to mirror the significant corrections witnessed in the crypto market in recent weeks, it highlighted the challenges of navigating market fluctuations amid shifts in trading activity.
On Monday, Bitcoin’s price experienced a sharp 1% decline, dropping from above $71,000 to a low below $68,000 within hours, settling around $69,800. Despite this volatility, BTC managed to hover near the pivotal psychological level of $70,000, remaining below its record-high of nearly $74,000 reached in mid-March, data from CoinMarketCap showed.
The world’s oldest crypto asset traded in the red zone at the start of the month after it wrapped up the previous month with a price close to $71,300, reflecting a notable 16.6% uptick from the prior month’s closing figure of approximately $61,150. This remarkable monthly gain signifies a landmark achievement in BTC’s price trajectory.
In a recent statement to The Shib Daily, Matteo Greco, a research analyst at the publicly listed digital asset and fintech investment firm Fineqia International, highlighted Bitcoin’s remarkable performance last month. “March witnessed the seventh consecutive month of price growth for BTC, a first since its inception,” the analyst said.
Greco emphasized that this impressive upward trajectory began in the fourth quarter of 2023, fueled by market anticipation surrounding the potential approval of a spot Bitcoin exchange-traded fund (ETF) in the U.S. This anticipation materialized into reality with the official launch of the BTC spot ETF in early January 2024.
During the first quarter of 2024, Bitcoin demonstrated a significant surge in value, recording a 64.7% increase. The cryptocurrency’s price escalated from $42,300 at the beginning of the year to a peak of approximately $71,300. However, this impressive gain faced a minor setback at the start of April, as Bitcoin’s price slightly declined, currently hovering around $66,500.
The research analyst highlighted that the recent uptick in Bitcoin’s price can be largely credited to the demand for spot Bitcoin ETFs, which amassed approximately $12 billion in inflows since their inception. Nonetheless, Greco pointed out emerging signs of dwindling demand and profit-taking in this investment avenue. This trend is understandable, as a significant number of investors have already realized profits due to Bitcoin’s earlier price surges.
“The upcoming BTC halving event, currently expected for April 20, just seventeen days away, will halve block rewards for miners from 6.25 to 3.125 BTC, potentially impacting mining companies,” the research analyst added. “With BTC block rewards decreasing and the BTC hashrate consistently rising over the past few years, the profitability of mining farms has steadily declined, necessitating greater capital efficiency to remain viable,” he said.
“This dynamic compels mining companies to optimize capital efficiency and seek cheaper electricity sources, leading to an increasing use of renewable energy in BTC mining,” Greco explained. “The BTC mining rewards mechanism inherently drives greater efficiency with each step, enhancing network security, reducing carbon emissions, and promoting research into sustainable block confirmation methods.”
The analyst from Fineqia pointed out a notable deviation from Bitcoin’s historical cycles, particularly when the cryptocurrency reached a new all-time high before the BTC halving event. Despite this departure from the norm, the analyst suggested the potential for a continued upward trend over the next nine months, should historical patterns repeat themselves. Based on this analysis, a cycle peak for Bitcoin is anticipated to occur between the fourth quarter of 2024 and the second quarter of 2025.
