Bitcoin: The 2024 Halving Did Not Have The Expected Effect

Bitcoin faces an unprecedented challenge. Over 10% below its historical peak, the world’s leading cryptocurrency struggles to rebound despite the halving in 2024. This unexpected stagnation raises multiple concerns among investors and sector experts.

Bitcoin in search of its lost momentum

Since its last halving in April 2024, Bitcoin has not managed to reach a new historical peak. This is the longest cycle in crypto’s history without hitting a post-halving price peak. Bitcoin is currently suffering from a “lack of energy.” It seems we are in the midst of a prolonged period of stagnation. An analysis of cycles from market lows shows that the $69,000 level, reached in 2021, remains a significant hurdle.

This lack of dynamism contrasts sharply with traditional post-halving expectations, where a reduction in mining supply is supposed to strengthen Bitcoin’s value. Moreover, the disconnect between expectations and reality fuels market frustration.

The impact of U.S. economic policies on Bitcoin

Beyond the internal dynamics of crypto, the global macroeconomic environment plays a crucial role in Bitcoin’s current trajectory. The U.S. Federal Reserve (Fed), with its monetary policies and potential decision to cut interest rates in September, could have a considerable impact. A short-term rebound in Bitcoin could be triggered by a rate cut. However, this effect would be short-lived if market confidence does not strengthen.

While some predict that lowering interest rates could even lead to a further drop in Bitcoin by nearly 20%, the prospect of a rapid recovery seems to be fading. The waiting strategy imposed by economic uncertainty and lack of clear direction from regulators exacerbates market volatility.

In summary, the combination of weak market dynamics and an unpredictable macroeconomic environment imposes a period of wait and caution on investors. While the appeal of Bitcoin as a safe haven remains intact for some, others are beginning to doubt its ability to withstand global economic shocks without clear direction.