Bitcoin hasn’t exactly exploded in price since the halving occurred on April 10, 2024, leaving some to wonder where the markets may be headed. Has the opportunity to sell and take profits passed, or should you maybe be considering buying in now if you aren’t just holding strong on your current positions?
Let’s take a look at what’s happening with Bitcoin and altcoin prices.
Weak Price Action Coming Out of Halving
Bitcoin’s price has been pretty stagnant since the halving occurred, but it’s important to keep in mind that Bitcoin hit an all time high before the halving too. That’s something that has never happened in Bitcoin’s history, and it also rarely even trades close to its previous all time high coming out of a halving. But, just one month later, Bitcoin is not that far off from its new all time high set in March.
Typically, Bitcoin goes into a halving with weak price action and then is at a new high by the same time the next year, but this halving has been different for all of the reasons aforementioned. Bitcoin’s price did so well because of the approval of spot Bitcoin ETFs, but this also meant there was a lot of investors in profit as Bitcoin jumped from a $40k price point to its all-time high of almost $74,000 two months later. Bitcoin markets have had to absorb all of that selling pressure, and are actually performing well considering.
Bitcoin Dominance Increasing
Risky investment assets such as cryptocurrencies tend to have trouble when macroeconomic factors such as interest rates are high, though that is counterintuitive when you consider Bitcoin is a hedge against inflation. Regardless, when there is uncertainty about future macroeconomic conditions, it’s hard for Bitcoin’s price to do well.
Perhaps that’s why with the new Consumer Price Index (CPI) released for April, Bitcoin has gone from floundering around $60k to over $66k for the first time in almost a month.
But Bitcoin dominance is also increasing, as it’s approaching 55%. This is something that tends to happen when the altcoin markets are contracting/correcting, but it seems to be happening now even as some altcoins seem to be recovering.
Perhaps more interestingly, Ethereum is losing more ground against Bitcoin than it has since 2021, with the ETH/BTC ratio at a three year low. Though some may take this as a bad sign for altcoin season, it’s good to keep in mind that Ethereum has serious contenders in other blockchain networks now, such as Solana, and even the Binance Smart Chain, as both offer the same applications but with lower transaction fees.
What About Altcoin Season?
Altcoin season, which tends to follow a spurt from Bitcoin, is still certainly on the table for the summer and beyond. Assets like Solana already appear to be gaining some ground back on Bitcoin and other blue chip altcoins will likely follow before the smaller caps can make their gains.
However, with this halving already causing abnormal price action for Bitcoin, the way altcoin season plays out during this bull run may be different than usual, take longer than usual, or perhaps not be quite as generous as previous ones.
Closing Thoughts
Though there was certainly an opportunity to take profit around the Bitcoin halving and before, it seems unlikely that Bitcoin and the rest of the crypto market are still due for further pullback.
CPI data has helped risk-on investment assets like Bitcoin, and further reductions in the scope of the CPI and overall inflation will do nothing but help the prices of Bitcoin and altcoins. We could be in for an exciting summer.
