Get 40% Off
💰 Buffett reveals a $6.7B stake in Chubb. Copy the full portfolio for FREE with InvestingPro’s Stock Ideas toolCopy Portfolio

Bitcoin Forms Bull Flag Post Halving: How to Trade Potential Breakout

Published 24/04/2024, 10:26
BTC/USD
-
BTC/USD
-
ETH/USD
-
  • Despite the recent Bitcoin halving event, market reaction remains subdued, with Bitcoin consolidating within a narrow range.
  • Factors like limited supply, increased demand from Bitcoin ETFs, and a rise in long-term holders point towards a bullish outlook.
  • To spark a new rally, defending the $60,000 support level is crucial for Bitcoin bulls.
  • In 2024, invest like the big funds from the comfort of your home with our AI-powered ProPicks stock selection tool. Learn more here>>
  • The highly anticipated Bitcoin halving took place last weekend, slashing miner rewards from 6.25 BTC to 3.125 BTC per block. This naturally reduced the crypto's supply, and estimates suggest 94% of all Bitcoins have already been mined.

    Despite the halving event, the initial market reaction has been muted, with Bitcoin consolidating between $65,000 and $67,000. This could hint that the broader uptrend remains intact, for now.

    Several factors support this bullish outlook:

    • Limited Supply, Increased Demand: The finite supply created by the halving, combined with continued inflows into Bitcoin ETFs (particularly BlackRock) iShares Bitcoin Trust (NASDAQ:IBIT)) is expected to put upward pressure on demand.
    • Historical Behavior: Consolidation after a halving is typical. This time, however, the price surged to new highs even before the event, likely due to the launch of Bitcoin ETFs earlier this year. Impressive inflows – over 532,342 BTC ($35 billion) – have been recorded, with BlackRock (NYSE:BLK)'s product contributing roughly half.
    • Long-Term Holders on the Rise: Both Bitcoin and Ethereum are witnessing a decline in the percentage of tokens held on exchanges, suggesting less selling pressure and an increase in long-term investors.

    However, a hawkish Federal Reserve could act as a brake on the rally. The market currently expects the first interest rate cuts in September, but if disinflation slows, the Fed's pivot might be delayed until next year, potentially weighing on risk assets like Bitcoin. While the uptrend has decelerated since Q1 2024, there are no signs of a significant demand drop.

    Bitcoin's Bullish Charge Hinges on $60,000 Support

    The current price consolidation is forming a bull flag pattern, which typically signals a corrective phase following a strong upward move. This suggests the uptrend is likely to resume after the correction.


    For Bitcoin bulls to maintain control and propel prices higher, defending the crucial support level around $60,000 is paramount. A decisive breakout from the upper limit of the forming flat pattern would be a bullish signal, empowering bulls and potentially launching Bitcoin toward new historical highs.

    Ethereum's Correction: Where's the Bottom?

    Earlier this week, Ethereum bulls attempted to regain the $3,000 mark but fell short, failing to test the critical first major support level near $2,700. The question for Ethereum investors now is: how deep will this correction go?

    To resume the uptrend, breaking out of the supply zone around 3700 points is crucial. This breakout should pave the way for a rally to year's high above $4200.

    ***

    Want to try the tools that maximize your portfolio? Take advantage HERE AND NOW of the opportunity to get the InvestingPro annual plan for less than $10 per month.

    For readers of this article, now with the code: INWESTUJPRO1 as much as a 10% discount on annual and two-year InvestingPro subscriptions.

    • ProPicks: AI-managed portfolios of stocks with proven performance.
    • ProTips: digestible information to simplify a lot of complex financial data into a few words.
    • Advanced Stock Finder: Search for the best stocks based on your expectations, taking into account hundreds of financial metrics.
    • Historical financial data for thousands of stocks: So that fundamental analysis professionals can delve into all the details themselves.
    • And many other services, not to mention those we plan to add in the near future.

    Act fast and join the investment revolution - get your OFFER HERE!

    Subscribe Today!

    Disclaimer: The author does not own any of these shares. This content, which is prepared for purely educational purposes, cannot be considered as investment advice.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.