Bitcoin and other major cryptocurrencies experienced a sharp decline yesterday, disrupting levels that have been consistent for most of this week. The upcoming Bitcoin halving event, which will reduce the token supply, is seen as an important trigger for cryptocurrencies.
“Bitcoin seems to have seemingly lost direction,” said Yuya Hasegawa, an analyst at crypto exchange Bitbank. Despite the uncertainty surrounding the FED’s future interest rate decision, Hasegawa believes Bitcoin has the potential to test $74,000 in the short term.
The halving event, a scheduled change in Bitcoin’s monetary policy scheduled for around April 20, will halve the issuance of new tokens. This restriction on supply comes at a time when demand for BTC is increasing due to spot Bitcoin ETFs.
“Typically, in the weeks and months following previous halving events, we see a reduction in Bitcoin issuance resulting in a supply shock, which pushes Bitcoin and the rest of the digital asset market upward,” said Jess Houlgrave, CEO of blockchain technology group WalletConnect. and added:
“I expect something similar to happen this time, but there is potential for a more serious breakout because demand is now so high.”
*This is not investment advice.
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