Bitcoin Surges Past $64,000 Amid Halving Anticipation and Market Volatility
Bitcoin surged past the $64,000 mark on Friday, recovering from a dip below $60,000, amid ongoing volatility in the cryptocurrency space ahead of the imminent halving event.
The price of bitcoin stood at $64,739.04 around 6:15 a.m. ET, marking a more than 5% increase compared to its value 24 hours prior.
Other cryptocurrencies followed suit with notable gains. Ether saw a rise of over 3%, while Solana experienced an increase of around 10%.
Bitcoin had slipped below $60,000 late on Thursday, setting the stage for a tumultuous trading period. This volatility precedes the halving event, scheduled for this week, which slashes the rewards for bitcoin miners by half. Occurring every four years as part of bitcoin's code, the halving results in a gradual reduction in bitcoin's supply.
Historically, preceding bitcoin halving events have been associated with bullish runs for the cryptocurrency.
The recent drone and missile attack by Iran on Israel over the weekend impacted crypto prices, with bitcoin hovering around the $70,000 mark on Saturday.
However, bitcoin faces additional challenges at present. Geopolitical tensions were not the sole factor affecting crypto markets, pointing to bearish sentiments in miners' behavior, trading volumes, ETF flows, and US inflation data.
Ahead of the halving, miners are offloading their bitcoin holdings to secure their balance sheets. With reduced rewards, some mining operations may become unprofitable, prompting miners to capitalize on profits before the halving.
Analysis revealed that miner balances are nearing all-time lows due to extensive selling in anticipation of the halving. Moreover, negative net flows through spot bitcoin exchange-traded funds further exert pressure on bitcoin.
Despite the challenges, it has been a robust year for bitcoin, witnessing a 50% increase in price. Bitcoin reached an all-time high surpassing $73,000 in March.
The approval of bitcoin exchange-traded funds in the US earlier this year contributed significantly to last year's gains and continued momentum into 2024.