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- Bitcoin price is in rebound mode after slightly impressive US Inflation – CPI data.
- Impact of general market trend and Bitcoin halving on miners explored by analysts.
The selling pressure for Bitcoin (BTC) is projected to ease following the release of April’s Consumer Price Index (CPI). At the same time, prominent crypto analysts highlight a potential consolidation phase for Bitcoin miner revenue.
Bitcoin’s Reaction to CPI Data
Following information from the United States Bureau of Labor Statistics (BLS) showing that inflation data eased in April, Bitcoin saw an abrupt 7% spike in its price. Specifically, the CPI increased by 0.3%, slightly less than expectations.
BLS noted that the CPI measures the average change in customer pricing for goods and services over time. Per Crypto News Flash’s earlier announcement, it serves as an early indicator of inflationary pressures.
In response to April’s CPI data, Bitcoin surged to $65,152, while the S&P 500 index hit fresh all-time highs over the 5,300 mark. These movements indicate positive reactions from both traditional finance and the crypto market.
Besides Bitcoin’s reaction to the CPI data, analysts are looking to see how mining will react to the 2024 halving event, which reduced miners’ incentives by 50%. Based on historical patterns, Plan B pointed out that Bitcoin miner revenue recovers 2-5 months after a halving. He added that after this consolidation phase, Bitcoin’s price goes vertical.
Adding to this sentiment, Bitcoin analyst Willy Woo, states that inefficient miners get removed from the ecosystem at the halving. According to the analyst, they dump their BTC before dying. On the other hand, the analyst believed only the strong ones survive and as they operate on fatter margins and wouldn’t need to sell. These dynamics are anticipated to push miner sell pressure out.
Thesis:
Inefficient miners get culled at the halving.
They dump their BTC before dying.
Only the strong ones survive.
They operate on fatter margins so don’t need to sell.
Miner sell pressure gone.
Takes 2-5 months for the new supply/demand to reflect in price.
— Willy Woo (@woonomic) May 15, 2024
However, he projected that it would take 2-5 months for the new supply/demand to reflect in Bitcoin’s price. Tom Lee of Fundstrat is also upbeat about Bitcoin miners, claiming they have the “leverage” to drive up the cryptocurrency’s price.
At the time of this writing, BTC is trading at $66,252, up by 6.7% in the past 24 hours. Trading volume also increased by 77.8% to $42.8 billion, indicating renewed interest from investors.
Advancements and Challenges in Bitcoin Mining
As previously reported by Crypto News Flash, Block Inc., a firm led by Jack Dorsey said it plans to advance in its mining technology. Accordingly, the firm completed the development of a 3nm mining chip that can power its Bitcoin mining process.
This node update is a notable improvement over its predecessor, the five-nanometer node. It demonstrates Block’s objective of improving the present system through decentralization and increased Bitcoin mining efficiency.
This improvement comes only shortly after US President Joe Biden proposed a 30% excise tax on electricity used by miners. So far, this proposal has drawn criticism from the crypto community as it aims to curtail Bitcoin mining in the US.
