Bitcoin (BTC) just did something it has never done before in the lead up to a halving event, it broke its previous all-time high. The king of crypto touched just over $69,000 USD, with the hundreds of dollars varying depending on which platform you check.
This was an unprecedented move for Bitcoin, and with the halving still a month and a half away, it’s anyone’s guess what could happen to its price as we approach the event.
BTC Immediately Drops 7% After Hitting New High
Though it hit an all-time high, Bitcoin quickly dropped and was trading around $63k USD just a few hours after hitting $69k, leading some to question whether this was a big bull trap. But this is par for the course for Bitcoin when it hits new all-time highs.
When Bitcoin touched above its $20k high back in 2021, it then dropped 18% to $16k USD over the next week. It then traded sideways for a couple weeks, before it exploded up to $42k USD and dropped again. Then a few weeks after that, Bitcoin broke $60k USD.
Make of that information what you will, but pullbacks are nothing new for Bitcoin, and seem to be no indication of where the market is headed. Corrections are necessary, and though seeing Bitcoin drop to even the $50,000-$60,000 might make some investors concerned, most will see it as a buying opportunity.
What’s Next for BTC?
Bitcoin seems likely to consolidate a bit before it makes another attempt at cracking the new all-time high and then the $70k threshold. This means there will likely be tests at support in the various ranges that Bitcoin has hit over this current run.
It’s important to remember that this run is different from previous bull runs when making your investment decisions. There has never been a bull run where financial institutions were buying Bitcoin to fulfil their spot Bitcoin ETF obligations.
There certainly wasn’t a run where these same institutions were buying over 40,000 BTC a week with only 6,300 being mined over that same time period. Let alone the reality that in a month and a half, that 6,300 BTC coming to market is cut in half.
It’s also important to remember that retail investors still haven’t really jumped into the market, let alone any other large players that may become interested such as corporations or sovereign states (think El Salvador).
Setting Up For Another Run
Bitcoin seemed to be making a run with no pullbacks, going from $42k all the way to its new all time high, but pullbacks are healthy. With Bitcoin seeing a correction, it seems to only set up the asset for another run as profits are taken and available Bitcoin gets absorbed by various parties.
The amount of Bitcoin available on exchanges is lower than it has been in six years, when its price was only about $8,000. With spot Bitcoin ETFs, the halving approaching, and fiat currencies losing purchasing power seemingly everyday, we may have the perfect storm for Bitcoin to explode like it never has before.
