The most anticipated event for the crypto industry in April 2024 will be the Bitcoin halving. However, preceding this event, the reward reduction procedure for miners took place via a hard fork – Bitcoin Cash. How did this reflect on the market and prices?
Bitcoin
From March 29 to April 5, 2024, Bitcoin decreased in price by 2.74%. At the beginning of the week, the leading cryptocurrency struggled to stay above $71,500, but in the latter half, BTC dropped to $64,500, marking a ten-day low.
This marked the lowest supply of the largest cryptocurrency on exchanges in three years. The CryptoQuant analytical platform noted an outflow of 90,700 BTC over the last month. Banks have begun directly engaging with Bitcoin miners. According to Asher Genoot, CEO of mining company HUT 8, this practice will become commonplace soon. Another analytical platform, Glassnode, presented a weekly report indicating an interesting trend: the gap between long-term and short-term investor supply is narrowing. This is explained by BTC’s price increase from mid-March to late April, prompting major players to partially cash out profits. Technically, Bitcoin is within a wide range between resistance at $73,794 and support at $60,760. The overall trend remains bullish as the price is above the 50-day moving average (depicted in blue), and the RSI indicator is above 50.
The fear and greed index remained unchanged compared to the previous week, at a value of 79, signaling extreme greed among Bitcoin investors.
Ethereum
Ether decreased by 7.5% over the past week. The most significant drop occurred in a single trading session on Tuesday, with ETH plummeting by 6.46%. The second-largest cryptocurrency by market capitalization failed to hold above $3,600 and is currently trading near $3,250.
Despite the price decline, Ethereum’s fundamentals are quite strong. Coin98, an analytical company, published a report stating that several metrics for ETH significantly increased in the first quarter of 2024. For instance, revenue solely from fees rose to $1.17 billion, a 155% increase compared to the same period in 2023. The number of daily active users on the network increased to 404,000, and daily transactions rose to 1.18 million.
There are finally some movements regarding spot ETFs for Ether. The U.S. Securities and Exchange Commission (SEC) announced a three-week deadline to respond to applications from companies like Fidelity, Bitwise, and Grayscale Investments.
Technically, Ether continues its correction. It will be crucial for the second-largest cryptocurrency to remain above the support level of $3,059. The dominance of bears is indicated by the price falling below the 50-day moving average (depicted in blue), and the RSI indicator is now below 50. A trend reversal could be expected after surpassing the resistance level of $3,679.8.
Bitcoin Cash
Unlike Bitcoin and Ethereum, Bitcoin Cash saw a price increase. The growth over the week was just under 10%. On April 1st, BCH surpassed $700 for the first time since November 2021. Despite the price rise, there were more negative sessions (four) than positive (three).
The main event of the week for Bitcoin Cash was its second halving in history. Miners’ rewards for block production are now 3.125 BCH. The first halving occurred on April 8, 2020, reducing the reward from 12.5 BCH to 6.25 BCH. It was after this halving that Bitcoin Cash began its upward trend again. From April 1st to 3rd, the price dropped by as much as 19.5% at one point. It’s worth noting that this week the Bitcoin Cash team announced an upcoming upgrade scheduled for mid-May. The upgrade will implement the concept of an adaptive block size limit, where the BCH block size will be determined based on the average of recent blocks. The primary goals are to minimize susceptibility to spam attacks and reduce transaction costs. Technically, Bitcoin Cash remains in an upward trend, confirmed by indicators: the price is above the 50-day moving average (depicted in blue), and the RSI is above 50. Support and resistance levels are $562.8 and $718.87, respectively.
Cryptocurrencies are showing divergent dynamics. Bitcoin and Ether decreased in price, while Bitcoin Cash increased. The latter’s success is attributed to the halving that took place on April 4, 2024.