Bitcoin rose above $64,000 on Friday, recovering from a dip below the $60,000 mark, as the cryptocurrency continues to experience volatility ahead of an upcoming breakout event. The price of bitcoin rose 2% to $64,640.00 today.
Other cryptocurrencies also surged. Ether rose more than 3% while solana recorded a gain of about 10%.
Traders are in an optimistic mood ahead of the upcoming Bitcoin halving event, which is scheduled to take place later this week. This is when rewards for bitcoin miners are halved. Halving happens every four years and is written in the Bitcoin blockchain code. As a result the supply of bitcoins decreases into the market.
In previous bitcoin cycles, halvings preceded bullish runs for cryptocurrencies. Crypto prices at the same time are also influenced by geopolitical sentiments. At the same time there are other factors that plague bitcoin at the moment.
“Geopolitical tensions are not the only factors influencing the crypto market over the past week. We can see similar bearish sentiment across miner behavior, trading volume, ETF flows, and news coming out of US inflation data,” analysts at crypto bank Amina said in a research note on Friday.
Analyst Amina says miners are selling their bitcoins ahead of the halving. This is because halving reduces their rewards, there may be some operations that become unprofitable. So miners try to strengthen their financial statements.
“Currently, the remaining miners are at near all-time lows. This comes after heavy selling from miners as they rush to take profits ahead of the fracturing,” Amina said in the note.
Net flows through spot bitcoin trading funds have been negative for the past week, according to analyst Amina, who sees that adding pressure on bitcoin.
This has been a strong year for bitcoin, where its price is up 50%. Bitcoin hit a record high above $73,000 in March. Bitcoin-traded ETFs, which were approved in the US earlier this year, drove most of the gains last year and into 2024.
