Bitcoin rallies ahead of halving event

Bitcoin prices rallied on Thursday rising above $63,000. If the BTC price declines, support can be found at $60,000 again, while resistance may be encountered near $72,800. 

Ethereum prices rose above the key $3,000 level on Thursday. If Ethereum's price declines, it may encounter support near $2,800, while if it increases, resistance may be encountered near $3,600.

Bitcoin recently reached a new all-time high of $73,800. Bitcoin’s bullish run has renewed interest in crypto markets, boosting other cryptocurrencies as well. Bitcoin has encountered significant selling pressure as well, however, causing increased volatility in the past weeks as bulls wrestle with bears. 

Bitcoin price is exhibiting high volatility as the Bitcoin halving event is approaching. Every halving event cuts the rate at which new bitcoins are released into circulation in half, increasing the scarcity value of Bitcoin. The halving is scheduled approximately every four years, and the next Bitcoin halving event is expected on April 20th raising the value of the cryptocurrency.

Crypto markets have been under pressure in the past week by the escalation of hostilities between Israel and Iran. Fears that the war will spread in the Middle East are promoting a risk aversion sentiment putting pressure on risk assets such as cryptocurrencies. Tensions in the Middle East have been high after the recent airstrike on Iran’s embassy in Syria. Iran accused Israel of the attack and launched a retaliative drone strike on Israeli ground over the weekend. Israel has, in turn, threatened Iran with retaliation for the drone attack, and the Israeli war cabinet has met to discuss the terms of Israel’s response against Iran. The US has pledged to support Israel in the conflict, raising concerns of a wider regional conflict. 

Later this week, however, markets reassessed geopolitical risks as Israel seems to be pondering its response against Iran and a retaliation does not appear to be imminent. Israel’s Prime Minister Benjamin Netanyahu has vowed to retaliate, but any action will likely be taken after Passover at the end of the month, giving markets time to digest the situation.

The approval of Bitcoin spot exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) has caused cryptocurrency prices to surge over the past few months. The SEC has approved 11 applications boosting Bitcoin price. Spot Bitcoin ETF demand has been on the rise, boosting the cryptocurrency as well.

Cryptocurrency prices are also affected by central banks’ interest rates. High-interest rates are putting pressure on risk assets, while the promise of rate cuts boosts crypto markets. The US Federal Reserve kept interest rates unchanged at its latest policy meeting in March, within a target range of 5.25% to 5.50%. Odds of rate cuts are becoming more moderate, boosting crypto markets, as policymakers have stated that they intend to start reducing interest rates slowly.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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