Bitcoin Breakout Continues

Bitcoin prices have broken out to further news highs for the year this week as the rally continues. Following a brief pause into the end of last week, BTC futures are now back in the green with the market very close to testing the all-time-highs around mid $69k. A big driver behind the current rally is excitement ahead of the upcoming halving event in April. The event essentially slows down the supply of bitcoins by reducing the reward for mining them. Given that Bitcoin is almost at peak supply of 21 million coins, this halving event coming at a time when institutional demand has just entered the market makes for a very interesting backdrop.

Bitcoin Halving

Typically, Bitcoin has tended to rally on the back of prior halving events when viewed over a 12-month period. However, the immediate dynamics around the event are a little different. Research undertaken by K33 Research shows that over prior halving events, Bitcoin tends to rally around 30% in the 50 days prior before consolidating with an average 3% gain over the 50 days post-halving. Given the current rally, there is certainly plenty of room for a “buy the rumour, sell the news” dynamic to play out.

Bullish Outlook

Looking ahead, however, the outlook remains firmly bullish for Bitcoin. With institutional demand on deck and ETF inflows soaring (around $7.4 billion taken so far) the broader view is for a continuation higher this year with some players touting $100k price targets. Indeed, any pull-back seen around the halving event might well offer better levels to position for a resumption of the bull trend over the remainder of the year.

Technical Views

Bitcoin

The weekly charts show the scale of the moves we’re seeing currently. Price is now testing above the 64540 level with the all-time-highs now close above. If we see any correction lower from this area, 59755 is the local support to note. While we hold above this level, focus is on a further push higher and a breakout to fresh, record highs.