Bitcoin (BTC) is starting the second week of April with a strong surge, surpassing $70,000. The cryptocurrency is capitalizing on its gains and inching closer to its all-time high. Traders are eagerly anticipating further upside as BTC’s price momentum continues. However, volatility may persist as the next block subsidy halving is just days away, which will decrease the reward per block by 50%. It’s important to keep an eye on network fundamentals, as difficulty is expected to reach new record highs this week.
In addition, macroeconomic sentiment is cool as markets are pricing out the possibility of a swift interest rate cut from the US Federal Reserve. The upcoming week will also see key US macroeconomic data, including the Consumer Price Index (CPI) and Producer Price Index (PPI) for March. This data will provide insights into the Fed’s views on rate cuts. Meanwhile, Europe and the UK are considering cutting rates sooner.
Bitcoin miners are preparing for the upcoming halving, with less than two weeks remaining. The halving will reduce the number of new bitcoins unlocked per block by 50%. Mining costs are expected to double after the halving, which could impact smaller participants in the market. However, some experts believe that revenue flows will be preserved due to the introduction of Bitcoin Ordinals and increasing fees.
Despite a month of consolidatory price action, Bitcoin network fundamentals remain strong. Mining difficulty is set to increase by approximately 2% and reach a new all-time high. The mining hash rate is also at one of its highest levels. Preparations for the halving have been underway, including efforts to increase mining output.
Bitcoin’s long-term holders (LTHs) have been active sellers at current prices. However, this is considered normal and should not result in significant selling pressure. Historical data shows that LTHs tend to sell around 14% of their BTC supply during bull markets, and so far, less than half of this has been sold. In previous cycles, new demand for Bitcoin was able to absorb LTH sell-offs for several months while pushing prices higher.
Please note that this article does not provide investment advice or recommendations.