Bitcoin Starts 2024 on a Positive Note with Historic "Golden Cross"
The beginning of 2024 marks a significant milestone for Bitcoin as it achieves its first-ever "golden cross," a term in trading that occurs when the cryptocurrency's 50-day moving average surpasses its 200-day moving average. This event, depicted in the chart below, is considered by some analysts as an indicator of the market entering a bullish phase.
This development comes nearly three years after Bitcoin experienced the dreaded "death cross," a precursor to a substantial decline that led to the cryptocurrency losing over half of its value in the subsequent year.
Bitcoin's recent price surge can be attributed to the anticipation surrounding the US Securities and Exchange Commission (SEC) approving the first spot exchange-traded funds (ETFs). The initial approvals, granted last Thursday, opened doors for billions of dollars worth of institutional investment, propelling Bitcoin's price to a 21-month high.
Following a brief correction of around 10 percent, Bitcoin's price has stabilized just above $42,000, prompting some analysts to anticipate further positive momentum in the coming weeks and months.
Simon Peters, a market analyst at the online trading platform eToro, expressed optimism, stating, “With the rails now in place for institutional investors to get Bitcoin exposure through a regulated vehicle, we could be set for an explosive 2024.”
As the crypto market takes a brief respite, attention is shifting towards the upcoming block reward halving. This event will witness a 50 percent reduction in the rewards for mining Bitcoin, effectively reducing the supply without impacting demand in theory.
This anti-inflationary measure, inherent in Bitcoin's code, has historically led to record-breaking rallies. Analysts speculate that the next halving event, scheduled for April 22, 2024, could propel Bitcoin above its previous all-time high of $68,000 reached in November 2021.
During the upcoming halving, the mining reward for a Bitcoin block will decrease from 6.25 BTC to 3.125 BTC. This reduction will lower Bitcoin's annual inflation rate from 1.7 percent to approximately 0.85 percent, dipping below 1 percent for the first time.
As Bitcoin enthusiasts await the halving event, the positive start to 2024, coupled with regulatory advancements, sets the stage for an intriguing and potentially explosive year in the world of cryptocurrency.
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