Bitcoin has lost its momentum. Will he get it back in April? Halving is just around the corner

From two weeks bitcoin rate corrects previous incredible increases, the last wave of which occurred after January 23, when strong inflows into ETFs, and outflows from GBTC stopped scaring the market. During this time, from January 23 to March 14, the price of bitcoin increased by over 90%, setting an all-time high of almost USD 74. However, since then, the bitcoin price has corrected by approximately 000%.

Bitcoin Price Correction May End Soon?

One of the measures whose changes are to some extent imitated by the exchange rate Bitcoin, is market liquidity, which can be tracked through changes in bank reserves at the Fed. Since 2017, the change in these reserves on an annual basis has been 70% correlated with the change in the bitcoin price, and since January 2023 this correlation has been 90%. Due to the fact that the level of these reserves increased significantly in March last year due to the rescue of US banks, the y/y change in March 2024 decreased significantly from over USD 600 billion y/y to approximately USD 128 billion y/y. However, the base effect will soon come to an end and the level of reserves may continue to increase due to the decline in reverse repo.

The first date is March 27, and the second is April 10, 2024. It seems that after these dates, if bitcoin continues to correlate with the change in bank reserves at the Fed, another wave of growth impulse may begin. Thus, a new all-time high may be established in April.

It is also important to note that the last change in reserves and its increase of over USD 500 billion occurred from September 2023 to March 2024. Currently, a reserve change of a similar scale will likely only occur in April alone. It is therefore possible that the effects of the increase in liquidity y/y will accumulate from half a year to one month. Will this result in a significant change in the price of bitcoin? We will be able to verify this very soon.

Bitcoin halving in 27 days

Additionally, it should take place in 27 days halving bitcoin, which should fall on April 19. This is possibly another important factor to which the bitcoin price may react. So far, a new high appeared after the halving, in this cycle it was set before. Therefore, it is possible that we will still be able to observe the front-running halving. It is also possible that April may bring a typical alt season on larger cryptocurrencies, and not only on meme coins, as so far. These concepts will be resolved soon.