Bitcoin price remained stuck in a narrow range on Monday morning as investors waited for the upcoming halving event and as demand from ETF holders continued. It was trading at $70,870, a few points below its all-time high.
Bitcoin supply in exchanges
Bitcoin will go through its halving event later this month, a major event that will affect its supply growth. It does this by reducing the block rewards offered to miners. In this case, the reward will drop from 6.25 to 3.125 when the block height reaches 840k.
The implication of all this is that Bitcoin supply growth will be affected substantially as the number of new coins produced each day is expected to drop from about 900 to 450. That is a highly bullish catalyst for the BTC price because demand is still rising.
Most of this demand is coming from ETF providers. Data shows that the Grayscale Bitcoin Trust (GBTC) has over $23 billion in assets while the iShares Bitcoin Trust (IBIT) has more than $17 billion worth of coins.
The Fidelity Wise Origin Bitcoin Fund (FBTC) has $9.8 billion while the Ark 21Shares Bitcoin ETF (ARKB) has $3 billion. Taken together, all spot Bitcoin ETFs have over $60 billion in total assets, a great number considering that ten of them are new.
A few things are happening in the Bitcoin industry. Data compiled by CoinGlass shows that Bitcoin balances on exchanges has been in a strong downward trend. It has crashed to 1.7 million from the year-to-date high of 1.9 million. The current amount is the lowest it has been in more than a year, as shown below.
Bitcoin mining difficulty rises
Meanwhile, Bitcoin mining difficulty has been in a strong uptrend and is now sitting at its all-time high. This difficulty jumped to a high of 83.95 on March 25th and has eased slightly to 83.3. This difficulty is notable since it was at 46.84 in the same period in 2023, as shown below.
Bitcoin’s hash rate remains slightly below its all-time high. Data shows that the rate stood at 566.12 million on Sunday, much higher than 326, where it was on the same day in 2023. It is a few points below the all-time high of 709.4.
Technically, as I wrote on Thursday, Bitcoin price has also formed a cup and handle pattern on the weekly chart. This means that the coin will likely have a strong bullish breakout in April, with the next resistance level to watch being at $80,000. This view will be confirmed if BTC price jumps above the year-to-date high of $73,500.
