Recent reports from Bitfinex suggest that price consolidation after the halving could be faster than expected
Despite their inherent risk, cryptocurrencies continue to attract investors from around the world, generating a constant flow of daily million-dollar transactions.
Bitcoin's recent #halving event, which halves rewards for miners, seeks to control inflation and maintain scarcity of this market-leading cryptocurrency.
This phenomenon, which occurs every four years, or after 210 thousand blocks are mined, usually leads to an increase in the value of #Bitcoin , although this increase may take time to fully manifest. However, analysts indicate that the effects could be closer than anticipated.
Specialists at the Bitfinex cryptocurrency exchange platform, as reflected in an article on the specialized portal Cointelegraph, indicate that Bitcoin could face a period of price consolidation of up to two months after the halving.
The impact of the Bitcoin halving
The latest market report, Bitfinex Alpha, suggests that the cryptocurrency could remain the main bellwether of price dynamics for the cryptocurrency market throughout May, and act as the leading indicator for total market capitalization.
This analysis highlights that the macroeconomic outlook shows greater resilience compared to previous years, and the possibility of reductions in interest rates seems low in the short term.
Experts also highlighted that both consumers and businesses are "better prepared and informed" about the underlying economic situation than in previous market cycles.
“Consequently, we believe we could see a 1-2 month consolidation in Bitcoin prices, trading in a range with swings of $10,000 on either side,” the Bitfinex Alpha report states.
After the halving, which has decreased the number of new $BTC available, any positive effect on the price of Bitcoin would be observed in the following months, according to the report.
“At this point, the economy is also expected to be performing better, having achieved a soft landing and avoiding a recession, providing an additional boost to crypto assets,” said analysts at Bitfinex Alpha.
Other cryptocurrency traders share similar perspectives on Bitcoin's recent consolidation from its all-time highs reached over a month ago.
What other operators think
Michaël van de Poppe, founder of MNTrading, proposes that Bitcoin dominance may have peaked as traders begin to move liquidity into altcoins. On the other hand, cryptocurrency trader Matthew Hyland agreed with this point, also pointing out a loss of key support in Bitcoin's dominance.
The Bitfinex Alpha report also examined in detail the decline in dominance of #Bitcoin. According to the document, Bitcoin halvings usually cause a surge of interest towards altcoins, which experience a surge and gain market share.
"This shift occurs as Bitcoin's reduced supply growth rate is seen as a long-term bullish development, increasing investors' risk appetite, leading them to seek potential higher returns from alternative cryptocurrencies," notes the report.
Source: El Cronista
