The bellwether cryptocurrency, bitcoin, has been on a rollercoaster ride after breaching the $60,000 mark and continued retracing from its recent highs. Equally, the second biggest cryptocurrency, Ether, replicated the downswing of Bitcoin and dived below $3,000.
Analysts, however, warn that the downturn may not yet be over, thus pointing to a new possible cool-off phase. This, however, can continue further because the great investors who possess very big stakes in the Bitcoin market still have not taken the opportunity to buy the dip. According to Joel Kruger, currency strategist at LMAX Group, the $59,000 area is key for Bitcoin, as it has been throughout consolidation, and it will be the key area to break for any major short-term upside. Remaining above these, the focus would then remain on a potential push towards a new all-time high, potentially surging towards the elusive $100,000. On the downside, a close below $59,000 might deter the bullish view and open doors for a deeper correction towards the $45,000-$50,000 zone.
The downturn in Bitcoin's price coincides with heightened anticipation surrounding the upcoming Bitcoin halving event.
Google search interest in "Bitcoin halving" is now at levels that have overtaken the interest seen the last time before the 2020 halving. As this time around the halving date—around April 20—draws closer, the hype among the community seems to be building every day. The reduction of the block reward from 6.25 BTC to 3.125 BTC brings deep implications for halving on the supply dynamics of Bitcoin and most often triggers major market movements. This rise in dominance, too, is attributed to the correction and halving anticipation of Bitcoin occurring against the backdrop. The dominance metric of Bitcoin against other cryptocurrencies has risen to a very straight line and reflects a preference for the digital gold amidst broader market aversion to risk. Though this will prove to be a tough hurdle to climb, many layer-1 altcoins and Artificial Intelligence (AI) projects have recorded sharper declines, pushing further the ascent of Bitcoin dominance.
On the other end, market commenters have been optimistic about Bitcoin in the long term, despite the recent downturn, with comparisons drawn to historical patterns that suggest post-halving rallies. In this period of volatility through which the crypto market is treading, investors are waiting for the implications of the opportunities that might open up within the narrative of Bitcoin transformation and the impact lasting for all digital assets in general.
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