Investors and traders continue to hope that the price of Bitcoin, which has experienced some retracement in recent weeks, will continue its rally. But the halving is approaching fast, and the price seems to be losing its momentum.
In terms of the bitcoin price action, it is down nearly 7% during the past seven days, but it is still up approximately 58% YTD. Bitcoin made a high of $73,777 on March 14, and it started to lose momentum after that as the price recorded three consecutive days of losses and continued to move lower since then. The low since the high was $60,775, ahead of the Fed’s meeting.
Before we go further deep into the fundamentals of the Fed’s monetary policy and its influence on Bitcoin’s price action, the main reason that the bitcoin price has been moving to the upside is mainly based on hopes around the bitcoin halving event, which is taking place in mid-April.
Halving events are designed to reduce the rate at which new bitcoins are created, thus slowing down the overall supply of bitcoin. This scarcity mechanism is built into Bitcoin’s protocol and is intended to mimic the scarcity of precious metals like gold. The reduction in the rate of new bitcoin creation affects the supply side of the bitcoin market. If demand remains constant or increases, the reduced supply could potentially lead to an increase in the price of Bitcoin due to the basic economic principle of supply and demand.
Some investors anticipate that the…
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