JPMorgan predicts Bitcoin correction following halving

Bitcoin has retraced to $61,500 at the time of articulating this piece. That is a fall of 2.50% in the last 24 hours. It briefly touched the milestone of $63,000; however, it is now rallying downward on the chart. An analyst at JPMorgan has predicted that a Bitcoin price correction could happen when the euphoria around Halving cools down.

Bitcoin Halving happens once every four years to bring down the token supply. It slashes rewards for Bitcoin miners, making BTC rare and, hence, expensive. The historical context around Bitcoin Halving supports the argument that the prices will rise after April 2024, a time when halving is tentatively slated to happen. There is also speculation that the price may not change dramatically.

An analyst from JPMorgan said that halving is one of the most anticipated catalysts for gains in Bitcoin. Adding to that, the prices could still be lower. It is based on two fundamental principles: the cost of electricity and energy intensity. Both could be hampered in April to affect the productivity of miners. 

Assuming the production cost rises to the extent that it brings down profitability, the majority of the miners would want to withdraw from their positions. This will reduce the hashrate, which measures the industry’s total mining capacity.

They have highlighted that the current average Bitcoin production cost is $26,500 for every token. This could mechanically double after halving. Mining difficulty is expected to decrease by 20% compared to the original estimates.

Overall, the estimated price is $42,000 after April 2024. The rise in demand for ETFs is driving the price of BTC. The product has drawn new investors since January 10, 2024, when the US SEC approved eleven applications.

As for ETFs, the inflow was last recorded to be $612 million on Wednesday. BlackRock’s IBIT led the inflow with the said amount. Such a trend continues to push the price of BTC higher. While the token has been down by 2.43% in the last 24 hours, it has surged by 20.34% in the previous seven days and 46.28% in the last 30 days. The rise to $62,000 reflects a jump of 45% this year.

JPMorgan has backed the price correction but has also kept a window open for potential increases in the future. Assuming the price drops to $42,000 after halving, investors will likely accumulate tokens before the price rises again. BTC is teased to surpass its previous ATH of $69,000 by the end of 2024. That would pave the way for the next target of $100,000. This has been recognized as a psychological support level, which will place BTC in an ideal profitability position.

Roxanne Williams

Roxanne Williams has recently joined as a market reporter for CryptoNewsZ - the 24/7 crypto news site, where she produces recent stories, technical analysis and price updates on world's leading cryptocurrencies.

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