Bitcoin has returned to 71,500 in one fell swoop, and a "big event" will happen in the second half of April
Bitcoin halving will trigger violent fluctuations
Looking back at the historical market, Bitcoin halving has halved the miner reward, increasing demand but reducing supply, which is usually regarded as a bull market signal. However, BitMEX co-founder Arthur Hayes put forward a different view. He believes that the arrival of Bitcoin halving in April, coupled with a series of "tricks" by the Federal Reserve and the Treasury, will add fuel to the crazy sell-off of crypto assets and keep the crypto market under pressure for weeks.
He mentioned in a blog post that he believes that Bitcoin halving will push up prices in the medium term, but warned that cryptocurrency prices may weaken before and after the halving.
"The argument that halving is good for cryptocurrency prices is deeply rooted, and when most market participants agree on a certain result, the opposite usually happens," he wrote.
He believes that Bitcoin halving is also carried out when US dollar liquidity is tighter than usual, and outlines a theory about how the policies of the Federal Reserve and the Treasury affect the market.
“This is why I believe Bitcoin and crypto prices in general will plummet around the halving, which will add fuel to the frenzy of selling in crypto assets.”
“Can the market overcome my bearish bias and continue to move higher? Yes,” he wrote. “I’ve always been a big crypto fan, so I welcome being wrong.”
He went on to note that the second half of April will be a volatile period for risk assets as U.S. tax payments eliminate liquidity and the Fed begins quantitative tightening, reducing the money supply.
After May 1, after the Fed’s meeting on the same day, Hayes said he expects the Fed to slow the pace of money supply tightening and the Treasury “will likely” release an additional $1 trillion in liquidity into the system from the general account (TGA), which will drive the market.
Hayes cited the Bitcoin halving and a series of tricks from the Fed and the Treasury as the reasons for his decision to abandon the trade before May.
“If I miss out on a few percentage points of gains, but definitely avoid losses in my portfolio and lifestyle, that’s an acceptable outcome,” he concluded by emphasizing.
Can it knock on the door of $80,000?
According to 10x Research technical analysis, Bitcoin could soon rally to new record highs after breaking through so-called triangle resistance.
Earlier on Monday, Bitcoin briefly surpassed $72,000, crossing a triangle consolidation pattern defined by a resistance line connecting the March 15 and March 27 highs, and a support line connecting the March 20 and April 3 lows.
"If the breakout is bullish, we suspect Bitcoin could climb above $80,000 in the coming weeks, if not sooner," said Markus Thielen, founder of 10X Research. "Buying at $69,280 and setting a stop loss at $65,000 seems appropriate."
The upside target of $80,000 would equate to at least 10% upside from the current price of $72,300.
The breakout comes on the heels of a better-than-expected U.S. nonfarm payrolls report (NFP), which highlighted the resilience of the U.S. economy and spurred risk-taking in all corners of financial markets.
Bitcoin has been on a “full rebound” this year, with not only cryptocurrencies soaring to new highs, but also traditional assets such as Wall Street’s tech index, the Nasdaq, the broader S&P 500 and gold. The rise of cryptocurrencies has been supported by the continued expansion of the supply of major stablecoins.
In technical analysis, investors and analysts study price patterns to predict the future trend of an asset. Symmetrical triangles, commonly known as coils, represent consolidation with a narrowing price range. Markets usually accumulate energy during consolidation and eventually release energy in the direction of range resolution. Typically, symmetrical triangles end with a bullish breakout.
