6 Reasons Why Bitcoin Price and Altcoins Fall After Halving: Experts
Bitcoin price failed to maintain momentum and declined from all-time highs and crashed below the support levels near $68,300 and $63,400. Experts predicted a drop below $60,000 for consolidation to take off after the Bitcoin halving, and today BTC price dropped to $59,768. Could the Bitcoin halving trigger a sudden shift in sentiment that would lead to a massive rally in crypto markets?
1. Bitcoin Options Expiry
It is estimated that the Bitcoin halving will take place on Saturday, April 20. Before that, over $2 billion worth of Bitcoin and Ethereum options are expected to expire on Friday.
On 21 thousand Bitcoin options This bond, which has a notional value of $1.35 billion, will mature with a put-call ratio of 0.64. According to Deribit data, the maximum pain point is $66,000. Besides, 27,785 ETH option This bond, which has a notional value of approximately $0.81 billion, is about to mature and has a put-to-call ratio of 0.49. The maximum pain point is $3,150. Both BTC and ETH are trading below their maximum points, causing high volatility in the crypto market.
However, the biggest test of the market will occur at the monthly maturity date on April 26. 88 thousand BTC option of national value $5.5 billion is about to end. The put-call ratio is 0.66, indicating that calls are significantly higher than open positions. The maximum pain price is $60,000, indicating that there is a high probability of BTC price trading below $60,000 following the Bitcoin halving.
Besides, 860 thousand ETH option of national value $2.6 billion It will end with a put-call ratio of 0.51. The maximum pain point is $3,100. Thus, the market will prepare for more than $8 billion in Bitcoin and Ethereum options expiration.
Source: Deribit
Bitcoin and Ethereum open interest is falling due to lack of interest before the halving, and derivative volumes are also falling. Investors are calling for $100K in September.
2. Historical Model of Bitcoin
As the Bitcoin halving approaches, Bitcoin and the crypto market have experienced a pre-halving sell-off similar to past Bitcoin halving events. A sudden rise in BTC price to an all-time high is not possible as it usually takes several months for this to happen.
Elijah BoomForbes 40 Under 40 said Bitcoin was on a downward trend in the second and third quarters and believes this trend will continue this year. Additionally, the increase in BTC mining cost will cause miners to sell their assets as the mining reward will be halved to 3,125 BTC. He said, “I do not think there will be a decline in BTC and crypto, but after 7 months in a row, a few months of sideways movement would not be a problem.”
However, he still predicts a price target of over $150k for Bitcoin and a price target of over $12k for Ethereum. Altcoins will also witness a massive boost with increasing adoption of cryptocurrencies.
Source: Elja
3. Fed Rate Cut Delay and Macro Uncertainty
Warmer CPI, PPI and PCE inflation numbers, a strong labor market and the resilience of the US economy give the Federal Reserve the option of delaying interest rate cuts. Fed Chairman Jerome Powell and Vice President Philip Jefferson It has recently signaled a delay in interest rate cuts, and some reports even predict only 2 interest rate cuts this year.
The rally in stock and crypto markets was triggered by speculation that the Fed would cut interest rates in March, which was later moved to May. But recent inflation reports have caused Fed swaps to shift interest rate cuts to September. This caused a reversal in the stock and crypto markets. 10x Research CEO Markus Thielen claimed that CPI data is more important than the Bitcoin halving. CPI reached 3.5%, causing the BTC price to drop.
JP Morgan and other Wall Street banks predict inflation will remain high for months. Analysts now predict that the Bitcoin price will fall below $60,000 or even as low as $52,000. In a new 10x Research report, Markus Thielen “The price rise may not be immediate and the downward movement may open to 60,000, if not 52,000.”
4. Iran-Israel Tension
Tensions between Iran and Israel have resulted in losses of nearly $500 billion in crypto liquidations in the last few days. The global crypto market fell from $2.64 trillion to $2.21 trillion. The situation did not cool down as Israel’s war cabinet held meetings on how to respond following the Iranian airstrike.
These and other macroeconomic events US dollar index (DXY) will climb above 106, the highest level since early November. Like this US 10-year Treasury yield (US10Y) jumped to a 6-month high of 4.622% but failed to break lower. While Bitcoin moved inversely to the DXY and Treasury yields, the increase in both caused the Bitcoin price to drop to $60,000.
Kaiko reported this 90-day correlation of BTC Due to higher than expected US inflation data and increasing geopolitical tensions, the US Dollar index fell to its lowest level in a year with negative 0.24.
5. BTC ETF Release
Spot Bitcoin ETFs saw their fourth consecutive breakout this week. $165 million Wednesday. Bitcoin ETF purchasing activity has dropped significantly over the past few days, likely due to falling institutional interest and tax filings in the US.
Outputs Grayscale GBTC This week showed signs of slowing down. However, on April 17, outflows from GBTC increased from $79.4 million to $133.1 million. Ark 21 Shares Bitcoin ETF (ARKB) witnessed another day of negative outflows and Bitsel Bitcoin ETF (BITB) saw its first outflow of $7.3 million on Wednesday.
6. Leaving the Bank Due to End of BTFP
Treasury Reserve balances fall rapidly as NPL rises BTFP sewage. Without BFTP, banks are likely to fall again as the Fed delays interest rate cuts and conditions look bad. The Bank Term Funding Program (BFTB) is an emergency loan program created by the Federal Reserve to provide additional funds to banks.
The sudden failure of banks such as Silvergate Bank, Signature Bank, and Silicon Valley Bank in March 2023 led the Fed and Treasury Department to provide BFTP support to banks amid a massive bank run. Experts said a large amount of consistent liquidity was withdrawn as BTFP stopped issuing new loans. This is a short-term bearish trend for the markets.
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Varinder has 10 years of experience in the Fintech industry and has been dedicated to blockchain, crypto and Web3 development for over 5 years. A tech enthusiast and analytical thinker, he has shared his knowledge of disruptive technologies in more than 5,000 news stories, articles, and articles. Varinder believes in the great potential of future innovative technologies with parofix Media. He currently covers the latest updates and developments in the crypto industry.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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