Bitcoin price is experiencing a rebound after the release of the US Inflation – Consumer Price Index (CPI) data, which showed a slight improvement. Analysts are also exploring the impact of the general market trend and the upcoming Bitcoin halving on miners.
The CPI data, provided by the United States Bureau of Labor Statistics (BLS), revealed that inflation has eased in April. This news caused a sudden 7% spike in Bitcoin’s price. The CPI measures the average change in customer pricing for goods and services over time and serves as an early indicator of inflationary pressures.
In response to this data, Bitcoin surged to $65,152, while the S&P 500 index reached new all-time highs above the 5,300 mark. These positive reactions from both traditional finance and the crypto market indicate a favorable outlook.
In addition to the CPI data, analysts are studying how mining will be affected by the upcoming 2024 halving event, which will reduce miners’ incentives by 50%. Based on historical patterns, Plan B predicts that Bitcoin miner revenue will recover within 2-5 months after the halving. After a consolidation phase, Bitcoin’s price is expected to go vertical.
Bitcoin analyst Willy Woo supports this sentiment, stating that inefficient miners are removed from the ecosystem during the halving. These miners tend to sell their BTC before exiting the market. On the other hand, the strong miners, operating on higher profit margins, are expected to survive without needing to sell, thus reducing miner sell pressure.
However, Woo projects that it will take 2-5 months for the new supply and demand dynamics to reflect in Bitcoin’s price. Tom Lee of Fundstrat is also optimistic about Bitcoin miners’ ability to drive up the cryptocurrency’s price, emphasizing their leverage in the market.
Currently, BTC is trading at $66,252, showing a 6.7% increase in the past 24 hours. Trading volume has also risen by 77.8% to $42.8 billion, indicating renewed investor interest.
In terms of advancements in Bitcoin mining, Block Inc., led by Jack Dorsey, has completed the development of a 3nm mining chip, which is a significant improvement over the previous five-nanometer node. This development aligns with Block’s goal of decentralization and increased mining efficiency.
This progress comes at a time when US President Joe Biden has proposed a 30% excise tax on electricity used by miners. This proposal has faced criticism from the crypto community, as it could potentially hinder Bitcoin mining in the US.
In conclusion, Bitcoin’s price is rebounding after the release of the CPI data, and analysts are examining the impact of the upcoming halving on miners. The crypto market is showing positive reactions, and advancements in mining technology are being made despite potential challenges from regulatory proposals.