Bitfinex analysts predict that Bitcoin may undergo a period of price consolidation lasting up to two months following the halving. The latest Bitfinex Alpha market report suggests that Bitcoin will continue to serve as the price action benchmark for the crypto market in May and remain the leading indicator for the overall cryptocurrency market cap. The report emphasizes that the macroeconomic environment is more resilient than in previous years and the chances of rate cuts in the short term are low. Additionally, the analysts note that consumers and businesses are better prepared and informed about the state of the underlying economy compared to previous crypto market cycles. The report also states that any positive impact on Bitcoin’s price following the halving will be observed in later months, when the economy is expected to be performing better and avoiding a recession.
Various cryptocurrency traders are also expressing similar views on Bitcoin’s recent consolidation from its all-time highs. They suggest that Bitcoin’s dominance may have peaked as liquidity starts to shift towards altcoins. The Bitfinex Alpha report delves into technical details, pointing out that Bitcoin halvings historically result in increased attention towards altcoins, which rally and gain market share. This shift occurs as the reduced supply growth rate of Bitcoin is seen as a long-term bullish development that increases investor risk appetite, leading them to seek higher returns from alternative cryptocurrencies.
Ether, on the other hand, has been outperforming Bitcoin in terms of gains for two consecutive weeks, a trend that hasn’t occurred since February 2023. The report highlights Ether’s long-term role as a proxy for the altcoin market, making it a historical first mover before other altcoins catch up in terms of market trends. Checkmate, the lead on-chain analyst at Glassnode, also commented on Bitcoin’s recent consolidation, explaining that there has been a gradual “de-leveraging” across Bitcoin futures since its all-time highs in mid-March.