Bitcoin was trading at the bottom of its sideways channel for the past five weeks. The price surged once following the Grayscale’s victory against SEC. But it dropped down to the bottom of the channel right next day. Last week’s price action was again boring but most traders were happy that the price didn’t break below the sideways channel. However, such a long consolidation is quite terrifying for some investors.
And the dip below $25,000 has frightened the investors even further. The following Bitcoin weekly news may highlight some facts about how Bitcoin may perform over the coming days.
Bitcoin Halving is Not Enough
For many weeks, investors have been talking about the effects of upcoming Bitcoin halving claiming that it will potentially take BTC to a new all-time high. They support this claim by highlighting the historical price movement of BTC. But they’re missing an important point that the previous halvings didn’t guarantee significant price moves alone.
There were a number of other factors involved and growth rates of M2 money supply were the leading contributor in this regard. The historical data shows that Bitcoin experienced a bullish momentum after the halving. Historically, Bitcoin’s price bottomed out around 15-16 months before the halving.
The M2 money supply growth rate plays a crucial role in the growth of Bitcoin as it highlights a strong connection between Bitcoin and fiat liquidity. Currently, the banks are raising rates to fight off inflation due to which the M2 growth rate is below the ideal 6% mark. So, investors need to keep an eye on the broader macroeconomic context rather than just sticking to the halving.
Texas Power Crisis is Stopping Bitcoin’s Price Increase
Texas attracted a number of Bitcoin miners due to low energy costs. But the current power crisis is creating a lot of trouble for the miners. Many companies have already shut down their mining operations because the power crisis is worsening due to extreme weather events. The miners are seriously concerned because they’re also facing other problems like increased competition, low Bitcoin prices, and declining rewards.
It’s worth noting that a number of major mining facilities including AntPool, the second-largest Bitcoin mining pool, are located in Texas. The overall Hash Rate of Bitcoin will be affected following these shutdowns because AntPool contributes around 22.27% of the total Hash Rate.
During such power crises, the miners might have to sell their holdings to cover the expenses. It can ultimately lead to a bearish impact on BTC’s price.
Grayscale Urgest Quick SEC Approval
Following the recent legal victory, Grayscale has urged the SEC to speed up the approval of its proposed bitcoin ETF. The court made its decision in favor of Grayscale because the SEC didn’t provide sufficient reasoning for rejecting Grayscale’s bitcoin ETF proposal. It means that the SEC will now have to reevaluate Grayscale’s application.
But they may still use their right to appeal. However, Grayscale’s legal team is trying to get the application approved by arguing that it would be the best use of resources. It’s worth noting that the SEC has previously rejected all spot Bitcoin ETFs in an effort to protect investors from market manipulation. But at the same time, it has approved the Bitcoin Future ETF.
Grayscale argues that a spot Bitcoin ETF is also based on Bitcoin’s underlying price. So, the SEC can use the same arrangements for the spot ETF to monitor the participants.
Will Investors Be Affected By Rising Bitcoin Fees?
Bitcoin’s transaction fees have significantly increased recently. The miners are expecting a decrease in selling pressure following this step. Some Bitcoin miners started selling their BTC holdings to cover their costs. However, increased transaction fees will incentivize them so they may continue holding the BTC they produce.
A significant decline is also observed in the network difficulty. It will ultimately make the Bitcoin network more attractive to investors. Similarly, the number of retail investors has slightly increased recently. It shows that more people are interested in holding BTC. The amount of short-term holders has also increased recently.
Together, these factors can boost market confidence while affecting price trends.
Bitcoin Price Prediction by Anthony Pompliano
Anthony Pompliano, a notable figure in the Bitcoin community, has recently stated in an appearance on Fox Business that Bitcoin is getting ready for a bull run. He said that long-term investors don’t worry about market volatility because it’s normal in cryptocurrencies.
Pompliano thinks that the rising institutional interest is strengthening Bitcoin’s reputation as a legitimate store of value. He expects that a spot Bitcoin ETF will be approved by the end of the year. As a result, more institutions will start considering Bitcoin as a hedge against inflation.
Pompliano also discussed that Bitcoin will play a significant role in the future of finance while disrupting traditional financial institutions. Pompliano believes that international recognition and institutional adoption can initiate the Bitcoin bull run.
Bitcoin Weekly Technical Analysis
Bitcoin’s price drilled through the support of weekly sideways channel but the price immediately rebounded. These kinds of moves are usually initiated by the whales to liquidate the retail investors. If the price continues increasing after this, it can be a healthy sign for Bitcoin holders.
But if the price is drilled through the weekly support several times, the support will eventually become weak.
Ethereum’s price movement is also worth considering as it’s moving in a range for more than a year. This formation is usually considered a bear flag but when it appears on a higher time frame, it can indicate accumulation on a large scale. Ethereum is also an important asset in the crypto space. So, it may offer better returns if Bitcoin’s bull run begins following the halving event and rising institutional interest.
Bitcoin’s recent dip below $25,000 has raised questions about its near-term prospects. Factors like the Texas power crisis, regulatory developments, and transaction fees are influencing its trajectory. Amidst uncertainties, Anthony Pompliano’s bullish outlook and Ethereum’s potential offer hope. Crypto investors must remain watchful, as Bitcoin’s future remains dynamic and unpredictable.
We invite you to subscribe to our weekly newsletter if you need regular updates about Bitcoin and the crypto market.