The Bitcoin price (BTC) posted its strongest performance on record in the second quarter, after a massive drop on March 13, when the price fell below USD 3,600 before eventually topping USD 10,000 in the following three months.
Skew researchers said:
„Bitcoin is having today, its third best quarterly close in its young history.“
Three key catalysts that fueled Bitcoin’s historic April-June run were: the halving of the May 11 block reward, demand for BTC at low prices for several years, and a strong recovery in global equity markets.
Outlook and reasons for optimism: Why will Bitcoin go up in price?
The halving of the block reward
On May 11, Bitcoin’s blockchain network went through the third reduction to half the block reward. This reduction is aimed at slowing the rate of production of BTC by half, as Bitcoin approaches its fixed supply of 21 million.
After this reduction occurred, the miners instantly suffered a nearly 50% drop in revenue and were pressured to cope with the decline in profits. This led to a capitulation of talks among the miners on the way to the reduction.
The Bitcoin price rebounded to $8800 support showing that traders continue to buy at every drop
Despite this, the hashrate of the Bitcoin network remains at its highest. Considering, that in the past, each reduction led to an exponential run of BTC, the strength of the hashrate is a very relevant metric and currently inspires optimism among traders.
Possibly due to the resistance of the mining sector, the price of Bitcoin did not see a sharp drop after this event as analysts had predicted.
The 3,600 USD drop fed the demand for BTC
When the price of Bitcoin fell below USD 3,600 on BitMEX, the major U.S. exchanges saw an increase in demand. Many retail investors rushed to buy Bitcoin at the $4,000 level, which caused a rapid recovery to $5,800 and then $10,000.
In late March Coinbase said:
In late March, Coinbase said: „Since the crash, Bitcoin and the wider ecosystem of crypto currencies have recovered, while stocks continued to fall (S&P -6% vs. Bitcoin + 23% as of March 27). Coinbase clients in particular exemplified this buying behavior during and after the downturn.
Just one month before the drop occurred, the price of Bitcoin Millionaire was hovering around USD 10,000, many analysts noted that the price was testing a multi-year resistance level at USD 10,500 and flirting with the potential start of a bull market.
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Although the price fell below 50%, this story of BTC above USD 10,500 triggering a bull market remained attractive and contributed to increased demand from retail investors.