According to a recent Bitfinex market report, the Bitcoin supply squeeze has already begun following the recent halving event.
After closing last week on a bullish Doji candlestick following the halving frenzy, Bitcoin (BTC) price continued to grind higher on Tuesday. According to the latest market data, the flagship coin briefly reached $67,200 in the past 24 hours before stabilizing around $66,200 on Tuesday during the mid-London session.
The anticipated crypto volatility was reciprocated in most altcoins that edged higher led by Ripple Labs-backed XRP and Near Protocol (NEAR).
Insatiable Demand for Bitcoin
For the first time since the history of Bitcoin halvings, the supply on centralized exchanges dramatically decreased several months before last weekend’s event. Interestingly, Bitcoin miners have held strong on their supply despite the halving of their block rewards.
As Coinspeaker previously reported, the recent approval of spot Bitcoin ETFs in Hong Kong will add to the heightened demand triggered by the US-based spot BTC ETF issuers. Furthermore, more institutional investors are seeking to add Bitcoin to their respective balance sheets and investment portfolios to hedge against rising inflation.
With the current emission rate of around 450 Bitcoins per day, Bitcoin price will be compelled to rise higher to satiate the global demand. Already, nation-states led by El Salvador are gradually accumulating Bitcoin daily, thus adding to the supply shock.
Bitfinex’s Estimate Post Halving
According to a recent Bitfinex market report, the Bitcoin supply squeeze has already begun following the recent halving event. The Bitfinex analysts noted that the overall Bitcoin’s selling pressures – including from miners, and other crypto traders – will decline to nearly $30 million soon.
Combining it with the daily average spot Bitcoin cash inflows of about $150 million, despite the recent drop, would result in a huge supply vs demand shock. Furthermore, on-chain data shows that Bitcoin exchanges outflows have spiked to levels observed early last year, as investors prepare for more gains ahead.
“Meanwhile, the active selling by long-term holders has not precipitated the typical pre-halving price drop yet, indicating a robust absorption of this selling pressure by new market entrants,” analysts at Bitfinex noted.
Midterm BTC Price Expectations
Bitcoin price has continued to oscillate between $74k and $60k in the past two months as bulls attempt to re-establish dominance. Nonetheless, popular crypto analyst Michaël van de Poppe noted that the flagship coin could easily continue ranging in the coming months, and possibly pave the way for an anticipated altseason.
#Bitcoin is still consolidating within the range, through which this is now more than six weeks.
Boredom has come back into the markets, but anything sub $60K is a massive buy opportunity. pic.twitter.com/GgxjLUfSdX
— Michaël van de Poppe (@CryptoMichNL) April 23, 2024
From a technical standpoint, Bitcoin’s monthly Relative Strength Index (RSI) is currently retesting the bullish breakout on the 70 level. As a result, there is a huge degree of resemblance between the current bull cycle and the famous crypto bubble in 2016-2017.
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