Bitcoin’s path to $40K in play despite the departure of crypto’s most powerful man
The flagship crypto asset breached the $37.6K price level despite the departure of another significant crypto figure and setting it up for $40K.
The leak of a possible massive settlement with Binance early this week initially rocked the crypto markets, but sentiments changed in the ever-evolving digital space
The markets were rocked on Tuesday by the confirmation of the $4.03 billion fine and the guilty plea of the company’s founder and CEO, Changpeng “CZ” Zhao, who also agreed to step down from the role.
This caused bitcoin to drop below $35,8K briefly before breaching the $37.5K resistance level.
The crypto market is largely positive due to expectations that a deal with the largest crypto exchange in the world will increase the crypto industry’s expectations for a spot Bitcoin ETF though it will now have to abide by the regulations of traditional financial institutions
This year, the value of Bitcoin has already more than doubled, while Ethereum has only slightly increased in value, by 70%.
Investors are hoping that things improve even more in 2023 and that everyone will live in a truly greener future, as the holiday season appears poised to bring even more gains for the industry.
Consequently, Bitcoin halving is the main storyline for 2024 following a spot Bitcoin approval. The benefits received from mining Bitcoin are split in half during an event known as the halving.
For each block of transactions, they mine on the Bitcoin blockchain, miners currently receive 6 points to 25 BTC.
Nevertheless, these rewards will be reduced to 3.125 BTC as of the subsequent halving.
The halving has historically always been followed by an intriguing spike in the cryptocurrency market.
The incentives for block mining were lowered to 6.25 BTC during the most recent halving in 2020, and this marked the beginning of what turned out to be the biggest surge in the cryptocurrency market.
Bears on Bitcoin have little reason to exert pressure on the market while bad news has no effect because the final round of ETF decisions is slated for January and February. In the end, the route to $40,000 gets increasingly certain.
Data monitored by blockchain analytics company Glassnode highlighted that the proportion of the circulating supply of Bitcoin that was last active on-chain at least a year ago has risen to a record high of 70.35%, surpassing the previous peak of 69.35% in July.
In the wake of crypto-wide contagion and macro headwinds following its all-time highs in 2021, a strong belief from Bitcoin’s holder base is reflected in the new lifetime high.
Moreover, the proportion of supply that has not changed on-chain in the last two, three, or five years is at record highs.
It demonstrates that even though Bitcoin has more than doubled to $37,000 this year, long-term investors are not in the mood to sell.
Monthly futures contracts for Bitcoin typically have a different price than standard spot markets because participants want to pay more to postpone settlement.
There is now an 8% premium in Bitcoin futures, indicating that leverage long demand is significant but not overly so.
Considering the recent flow of regulatory news, this level is quite favorable even though it is lower than the 11.5% observed in mid-November.
