In the latest episode of The Market Report, Cointelegraph analyst Marcel Pechman delves into the possibility of a pre-halving rally in Bitcoin, discussing various factors that could impact the cryptocurrency’s price.
Pechman begins by addressing Standard Chartered bank’s projection of a $120,000 Bitcoin price based on the halving’s impact. According to the report, a pre-halving rally could increase miner profitability and subsequently reduce the net Bitcoin supply. However, Pechman presents a differing viewpoint, considering the continuous increase in mining difficulty and the news surrounding Riot Platform’s investment in new ASIC equipment. Over the past 12 months, mining difficulty has surged by 73%, while Bitcoin’s price has risen by 58%.
In terms of the $50,000 Bitcoin year-end price prediction, Pechman expresses skepticism due to the low odds of a spot Bitcoin exchange-traded fund (ETF) receiving approval by that time. However, if an ETF is approved within the next six months, an estimated $5 billion influx into Bitcoin could potentially push its price above $70,000.
Looking ahead to 2024, Pechman raises the odds of a spot Bitcoin ETF approval to 30%, while Bloomberg analysts anticipate even higher chances at 50%. With the considerable size and influence of institutions like BlackRock and Fidelity, Pechman suggests that a $10 billion inflow in the initial months following the ETF launch is feasible, indicating that Standard Chartered’s projection of $120,000 may be conservative.
Pechman highlights the potential impact of ETF approval
Pechman highlights the potential impact of ETF approval on the pre-halving rally, noting that investors may be anticipating such a development. This anticipation could cause the rally to either lengthen or shorten as investors make decisions before the event occurs. Pechman advises against succumbing to the fear of missing out (FOMO), suggesting that if an entry spot is missed, traders should consider waiting to dollar-cost average or exercise patience.
Finally, Pechman examines Glassnode’s on-chain analysis report on re-accumulation at the $30,000 price level. He notes that the concept of a “return to mean” is prevalent in traditional markets as well. When investors lack conviction to move the price significantly, they tend to refer to average levels observed over the previous two to three years.
As the Bitcoin market gears up for a potential pre-halving rally, market participants and investors are closely monitoring these factors that could influence the cryptocurrency’s price trajectory.
