The price of Bitcoin reached its highest level in 19 months, surpassing $42,000 and leading to the liquidation of many short positions in the past 24 hours. Analysts and experts believe that the bear market has begun, while some expect the real bear market to start after the expected block reward halving in April 2024.
Jeroen Blokland, a prominent fund manager and asset investor, points out that the current Bitcoin rally is very different from previous rallies that reached these levels. According to Blokland, Bitcoin’s momentum and its position as an “accepted” asset class are significantly different compared to the $40,000 levels in the past.
The mentioned block reward halving is a critical event for both the Bitcoin network and its price. This event occurs approximately every four years and effectively halves the block reward given to miners, thereby reducing the production of new BTC.
Historically, significant increases in BTC price tend to coincide with major industry changes. As we count down to the major Bitcoin event in 2024, the month of December typically stands out with strong rallies in the cryptocurrency market. Blokland’s comments suggest that there could be significant price increases in the largest cryptocurrency.
In addition to the potential for spot ETF approval and the upcoming block reward halving, the Bitcoin price is also affected by macroeconomic developments. Investors are focused on the Federal Open Market Committee (FOMC) meeting on December 13, where the latest interest rate decision will be announced. Market analysts believe that the FOMC will keep interest rates unchanged, which will continue to support the upward trend of risky assets like Bitcoin and altcoins.