Decentral Block Post

Bitcoin (BTC) has dropped nearly 15% from its yearly high of around $31,000, with the recent regulatory crackdowns on Coinbase and Binance crypto exchanges and the Federal Reserve's hawkish forward guidance accelerating its selloff.

Still, Bitcoin is up 60% year-to-date (YTD), holding above a technical support level of $25,000. Moreover, a new bull cycle can begin for a few reasons.

Bitcoin halving

The next Bitcoin halving, a pre-programmed event that slashes the cryptocurrency's supply rate by half every four years, is in April 2024.

The previous three Bitcoin halvings (2012, 2016, 2020) have all preceded massive BTC price rallies and new all-time highs. For instance, BTC is up 276% since the previous halving in May 2020. 

The market will likely be in an accumulation zone until the halving, according to analyst Lark Davis, who anticipates Bitcoin to test its record high of $69,000 in the next 18-24 months. One analyst even sees the price hitting $160,000 by April 2024.

Bitcoin (BTC) faces up to one-and-a-half years of “boredom” as the bull market gathers steam, a new prediction says.

In the latest edition of its weekly newsletter, “The Week On-Chain,” analytics firm Glassnode predicted an “arduous” period for BTC hodlers next.

Glassnode: Bitcoin hodlers set for 12 months’ “gradual accumulation”

After gaining 70% in the first quarter of 2023, but struggling to hold its ground recently, Bitcoin is dividing opinions when it comes to future price action.

With the 2024 block subsidy halving in sight, some believe a dramatic uptick will characterize the coming year, while others think it will take longer — perhaps until 2025 — for a new all-time high to hit.

For Glassnode, there are signs that a classic pre-bull market phase is playing out, but long-term holders will still need considerable patience.

In an interview with Bloomberg, ARK Invest CEO and chief investment officer Cathie Wood recently discussed why her flagship fund, Ark Innovation (ARKK), is adding to its position in shares of Coinbase (COIN) after the Securities and Exchange Commission (SEC) sued Binance, one of Coinbase’s biggest competitors.

ARKK purchased nearly 330,00 shares of COIN on June 6, 2023, worth about $17 million at the time, according to disclosure statements. Two other exchange-traded funds (ETFs), Ark Fintech Innovation ETF and Ark Next Generation Internet ETF, also added 35,700 shares (worth $1.8 million) and 53,900 shares (worth $2.8 million), respectively. 

Across all three funds, Ark’s average entry price is $272.75 to $282.93, with the firm’s total position currently valued at $1.77 billion. At the time of writing, COIN is trading at $53.90. Needless to say, the fund is deeply in the red on this trade so far.

As far as why she’s still bullish, her reasoning boils down to this: SEC enforcement will lead Coinbase to become the only game in town when it comes to cryptocurrency exchanges in the United States. Of course, this assumes that Coinbase will triumph in its own legal battles with the SEC.

Wood explained that she sees a difference in the accusations being brought against the two exchanges. While both are facing lawsuits by the SEC over the alleged trading and staking of unregistered securities, Binance may also be facing more serious charges.

The S&P 500 Index (SPX) has gained for five consecutive weeks, the first such instance since November 2021. In comparison, Bitcoin (BTC) is trading well below its local high of $31,000, made on April 14. This shows a clear divergence between the performance of the two asset classes.

Some analysts expect Bitcoin’s range-bound action to continue for some more time. Cryptocurrency traders will be looking for some positive triggers that could push the price above the range. One such rumor floating in the markets is that after BlackRock filed for a Bitcoin spot exchange-traded fund, Fidelity Investments may also follow suit. If that happens, it will be a positive sign for the markets.

Another positive for the cryptocurrency markets has been that the U.S. Dollar Index (DXY) softened in the past week. Historically, the dollar and Bitcoin have an inverse correlation, which may help limit the downside in Bitcoin and launch a relief rally.

Let’s look at the important resistance levels that need to be crossed to start a sustained recovery in Bitcoin and the major altcoins.

S&P 500 Index price analysis

The S&P 500 Index is in a short-term uptrend. The rally of the past few days pushed the relative strength index (RSI) into the overbought territory, indicating that a minor correction or consolidation is possible.