On April 19, there was a reversal in Bitcoin BTC -1.05% its price fell 6% to $59,640 in the first hours. However, it quickly returned. Over $64,500 cleared by the end of the day. The rally came ahead of the anticipated bitcoin halving event, set for April 20, which typically attracts significant attention from various groups, including mainstream media and spot bitcoin exchange-traded fund (ETF) providers.
The rise in Bitcoin price appears to be driven by optimism surrounding the halving event. This event is known to have fueled interest in the market due to an expected drop in miners' rewards leading to a lack of supply. This positive outlook has somewhat offset the impact of social issues currently affecting the markets.
Despite intraday volatility, liquidations in bitcoin futures markets remained relatively low at around $45 million, according to data from Coinglass. This suggests that traders were not over-leveraged, reinforcing the importance of the $60,000 threshold as a psychological support level for the asset.
According to analysts at Amina Bank, factors outside of voltage are also influencing the behavior of the bitcoin market. Variables such as trading volumes, ETF activity and recent US inflation data all contribute significantly to shaping their price movements.
Bitcoin miners have begun selling their holdings in half to take a profit ahead of an expected drop in mining rewards.
Strength in US indicators such as inflation data and labor market performance, which contributed to a 0.7% year-on-year rise in sales, suggests a reduced chance that the US central bank will cut interest rates soon. Despite that stability, the S&P 500 has fallen 5% since hitting a peak of 5,265 on March 28.
In the derivatives markets, an analysis of Bitcoin futures reveals that the upcoming halving has not led to an increase in demand for leverage. Current open interest in BTC futures stands at $29.8 billion, up from $28.6 billion just two days earlier. A comparison with the $35.5 billion figure from the week suggests that expectations related to the halving did not boost demand dramatically.
Additionally, the 3-month BTC futures premium and market sentiment measure is currently at 11%, reflecting bullish growth and down from last weeks 16%.
Despite the price changes, the premium remained strong at 9% on April 19, suggesting that while there is some optimism in the market, there is no frenzy as the halving approaches.
This scenario lays the groundwork for a halving as market players are keenly watching how this major event will affect Bitcoin price trends and the overall market environment in the coming days.
