Bitcoin (BTC), the biggest cryptocurrency on the market, is struggling to maintain its value after falling as low as $27,000. With no clear driver for a price increase, the market is presenting an uncertain outlook.
Markus Thielen, head of research and strategy at Matrixport, a cryptocurrency services provider, suggests that the wave of liquidity from lower US inflation that boosted BTC and other assets this year may have run out.
“The market needs new momentum to push prices higher,” Thielen said.
He points out that while the tech sector used to have a correlation with Bitcoin, this is not happening now, as the two do not share a common driving factor. The technology sector, for example, has been booming thanks to the artificial intelligence revolution and ChatGPT, but this momentum has not benefited Bitcoin.
Over the last month, the price of the NDXT stock index, which includes the shares of the 100 largest technology companies, has risen 13%. In contrast, Bitcoin saw a 7% drop over the same period, according to Google Finance.
Analyzing the situation, some experts warn that if the market does not find a convincing narrative to increase the price of Bitcoin, the next halving could end up being the driving factor.
Halving as Bitcoin Price Catalyst
The halving is the halving of Bitcoin issuance, an event that occurs approximately every four years, with the next scheduled for April next year. Historically, the halving has boosted the price of Bitcoin due to investors’ perception of the asset’s scarcity.
If that narrative becomes compelling again, we could see a rise in BTC prices. However, it is worth remembering that past patterns do not necessarily guarantee future repetitions.
In addition, the expert pointed out that other catalysts for the Bitcoin price could be the release of a Bitcoin Spot ETF in the US or China’s regulated release of cryptocurrency trading.