Bitcoin Facing a Pivotal Test of the Bull Run

Bitcoin is back above the $70,000 level, and the subsequent sessions will be critical for the uptrend. 

BTCUSD – Daily Chart

BTCUSD – Daily Chart

BTC trades at $71,731 after a recent pullback—the previous all-time high marked support at the $69,127 level. 

US crypto-related stocks were also set to start the week positively after Bitcoin climbed through $72,000 for the first time since mid-March as its reward halving draws closer. Coinbase was up over 5%, MicroStrategy, the largest corporate holder of bitcoin, rose 10%, and BlackRock’s bitcoin ETF was up around 6.5%. 

The market rally, which has seen assets such as gold and Bitcoin being used to hedge inflation or government policy, has been significantly influenced by the Federal Reserve’s plan to cut its key interest rates. This plan has been a critical driver for the recent Bitcoin price surge.  

The Bitcoin halving, which cuts the amount Bitcoin miners are paid for adding blocks to the blockchain by 50%, is set for April 20. After that event, they will be rewarded with 3.125 BTC per block. 

According to data from CryptoQuant CEO Ki Young Ju, the cost of mining using Antminer S19 XP PCs will double from $40,000 to $80,000 after the Bitcoin halving in mid-April. This significant increase in mining costs means mining coins will be negative below $80k, potentially reshaping the mining landscape. Halving is a milestone event that occurs every 210,000 blocks or every four years. 

” From a purely mechanical perspective, the Bitcoin halving event reduces the pace of Bitcoin creation used for validator rewards, which complement the validator revenue generated by transaction fees,” said Ken Timsit, Director at Cronos Labs.

“The number of new Bitcoins created annually is currently 1.6% of the maximum supply of 21 million Bitcoin. This number will decrease to 0.8%. Less Bitcoin to validators means less selling pressure, and historically this phenomenon has led to a 9-12 month period of upwards trajectory for the price of Bitcoin.”

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