Bitcoin fell to its lowest in over a month today. (Photo Illustration by Chesnot/Getty Images)
Bitcoin prices took a tumble today, plunging toward $60,000 and falling to their lowest point in over a month.
The world’s most prominent digital currency dropped to $60,090.43 earlier, according to CoinMarketCap.
At this point, the cryptocurrency had lost close to 7% of its value in under 24 hours and was trading at its lowest value since late February, additional CoinMarketCap figures reveal.
Over the next few hours, bitcoin fluctuated close to $60,000, repeatedly making attempts on that price level.
At the time of this writing, the digital asset’s price was right around $61,300.
The Upcoming Halving
These latest price movements took place shortly before the latest upcoming halving, which is currently scheduled to happen April 19.
When this event, takes place, the bitcoin mining incentive will be reduced by 50%, lowering from 6.25 units of bitcoin to 3.125 units.
As a result, the rate of new supply will be cut in half, marking the fourth time this has happened. Previous halvings took place in 2012, 2016 and 2020.
Multiple analysts credited the upcoming halving with contributing to bitcoin’s latest price movements.
Brett Sifling, an investment advisor for Gerber Kawasaki Wealth & Investment Management, gave this upcoming event partial credit for causing the recent declines in bitcoin prices.
“I believe that the recent pull-back in Bitcoin was two-fold,” he stated via emailed comments.
“First, part of this can be attributed to the classic saying, ‘Buy the rumor, sell the news’ in regards to the upcoming Bitcoin halving. Since Bitcoin price is driven primarily by supply/demand metrics and potential catalysts, it makes sense that some investors/traders will take profits when the catalyst is passing,” said Sifling.
Tim Enneking, managing partner of Psalion, also weighed in, supplying his views via email.
“It would appear that the standard halving narrative is still playing out, although some of the specifics have changed this time around (history doesn’t repeat, but it rhymes, as Mark Twain purportedly wrote),” he stated.
“BTC hit its ATH far earlier than prior halving cycles would indicate,” Enneking added.
“Normally, we wouldn’t have seen an ATH until early 2025. The spot BTC ETF was obviously the catalyst, with the halving coming soon and a possible spot ETH ETF in early May providing further impetus,” he said.
“Your specific question was whether this ‘is simply a matter of buy the rumor, sell the news,” stated Enneking. “That can’t really be the case because we haven’t had the ‘news’ yet, although we all know quite precisely when the halving will occur.”
“I think the recent price is more people front running an anticipated drop (whether due to ‘sell the news’, historical cycles, mean reversion or something else), coupled with some tough geopolitical and US economic news (Israel-Iran, China, ‘longer for higher’, etc.),” he added.
“In any event, it’s a healthy, much-needed consolidation after one heck of a run up over the past several months. It’s certainly not a reason to panic,” Enneking concluded.
Macroeconomic Factors
When explaining bitcoin’s latest price movements, several analysts also pointed out macroeconomic factors, for example the latest consumer price index (CPI) figures and anticipation surrounding Federal Reserve monetary policy.
As noted earlier, Sifling emphasized how anticipation surrounding the upcoming halving is influencing bitcoin’s price movements. However, he also cited other variables.
“Second, I think that macro factors weighed on Bitcoin prices. The inflation data last week, the recent global geo-political turmoil overseas, and Powell’s recent comments that suggested keeping rates higher for longer were all reasons for investors to get nervous and take profits off the table,” he stated.
“Since Bitcoin is viewed as a risk-asset to most investors, it seems that it was a correlated move as the U.S. stock market also pulled back.”
Grant Tungate, head of business development for Blockforce Capital, also spoke to the impact of these developments.
“Bitcoin’s recent decline from all time highs has been largely driven by macro forces,” he stated via emailed comments.
“The market has repriced the probability and speed of rate cuts on the back of higher than expected inflation data and Fed commentary,” Tungate added.
“Additionally, a strong dollar has put pressure on BTC. This selling has not been isolated to Bitcoin, but broadly across rate sensitive risk assets, with the Russell 2000 Index as an example declining ~8% from its recent peak a few weeks ago.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and SOL.
