After the launch and commencement of trading of the United States’ first spot Bitcoin exchange-traded fund (ETF), the price of the largest cryptocurrency briefly rose above the $49,000 level. Following this surge, attention turned to the short-term price trajectory of the largest cryptocurrency as its price retracted and the critical support level at $40,000 was at risk of being lost.
Bitcoin Could Retrace to $30,000, Analyst Predicts
Cryptocurrency expert FieryTrading summarized the potential outlook for Bitcoin following the ETF approval in an analysis presented on January 20. FieryTrading identified a correlation between bear market bottoms and the block reward halving events, drawing attention to a speculative model that could significantly increase Bitcoin’s price, drawing parallels with the second and third block reward halvings.
Based on the model indicated, the expert highlighted that there was a 300% price increase from the bottom during the second block reward halving, and a 200% increase during the third. The analyst suggested that a move towards $31,000 for Bitcoin would be reasonable based on historical trajectory, adding the following note:
Therefore, my assumption is that during the fourth block reward halving, the price will be around $31,000, which is a 100% increase from the $15,500 bottom. With BTC’s decline after the ETF launch, a move towards $31,000 is not far-fetched, as it has served as a major resistance throughout most of 2023 and thus acts like a magnet.
Another Major Catalyst for Bitcoin’s Rise: Block Reward Halving
With the Spot Bitcoin ETF failing to meet short-term price movement expectations, attention has shifted to other catalysts, particularly the block reward halving expected to occur in April. The expectations that were not fully met by ETFs are anticipated to be completed with the block reward halving.
Founder of SkyBridge Capital Anthony Scaramucci also believes that the block reward halving will support the rise in Bitcoin’s price. Scaramucci expects the largest cryptocurrency to reach $170,000 by 2025, powered by the ETF and block reward halving.
Despite Bitcoin’s underwhelming performance in response to the spot ETF approval, the overall performance of ETFs was noteworthy, achieving significant trading volume within days.
