According to one market observer, the anticipated pre-halving rally presents an opportunity for short-term profit-taking.
The current euphoric sentiment, coupled with institutional demand and the historical pattern of gains associated with bitcoin’s halving event, suggests that the cryptocurrency is poised to surpass its previous all-time high of $69,000 in March, as suggested by some traders.
Bitcoin halving events have historically triggered bull rallies, with prices surging by several hundred percent in the months following previous halvings. These events occur approximately every four years and result in a reduction of block rewards for miners. The next halving is expected in mid-April, according to a countdown clock.
As the supply of new bitcoins on the market decreases, prices tend to rise, provided that demand remains stable or increases. While past price movements may not necessarily repeat in the future, the anticipation of a rally often prompts investors to make significant bets on the asset.
Bryan Legend, CEO of Hectic Labs, explained that investor expectations of a supply reduction driving up prices, combined with a pre-halving rally, contribute to a renewed bullish sentiment in the market. However, Legend also noted that the rally leading up to the halving event presents an opportune time for realizing short-term gains.
Meanwhile, some traders anticipate bitcoin surpassing its previous peak of $69,000 in March, citing strong institutional demand and the early success of spot bitcoin exchange-traded funds (ETFs).
Ryan Lee, chief analyst at Bitget Research, pointed out that with 54 days remaining before the bitcoin halving and expectations of an interest rate cut by the Fed later in the year, bitcoin prices have a support level around $50,000 and could fluctuate to reach historical highs in March. Lee highlighted the record trading volume of nine bitcoin ETFs in the U.S., indicating strong institutional bullish sentiment.
On Tuesday, Bitcoin ETFs collectively traded $2 billion, with BlackRock’s IBIT recording over $1.3 billion in daily trading volume for the second consecutive day.
As of Wednesday’s Asian morning hours, Bitcoin was trading slightly above $57,200, marking a 1.5% increase over the past 24 hours. The CD20, a broad-based index, has also seen nearly a 1% increase.
