For brief moments last Friday and again on Sunday, Bitcoin (BTC-USD) etched closer to $70,000. Breaking above that is an inevitability. Even a drop from here is common since Bitcoin has a history of increased volatility after a great run.
Bitcoin rose when the BLS posted a mixed job report. Markets are hopeful that the job report would compel the Federal Reserve to cut interest rates. After Fed Chair Powell said that the central bank would not cut rates this month, markets moved the target date to June.
CoinLedger, a crypto tax software supplier, conducted a study that predicted that Bitcoin prices would reach $115,000 in 2024. The halving is a catalyst. The study cited that out of three halving events, prices rose by 400% twice on average.
When halving occurs, mining firms including Riot Platforms (RIOT) and Marathon Digital (MARA) would get half the reward. This would weaken the business model of those two firms. While MARA and RIOT stock is holding a wide trading range, watch out for their stock price to collapse. Unusually, Coinbase (COIN), a cryptocurrency platform, traded at close to its 52-week high. Besides short-sellers holding a 9.4% short float against COIN stock, markets anticipate Coinbase’s transaction volumes to rise.
Crypto investors should watch the next U.S. economic report on inflation. A hot inflation report sharply cuts the chances of interest rate reductions by mid-year. Markets and Bitcoin would have to adjust for lower rates toward the third quarter of 2024 instead.
