The fourth bitcoin halving concluded around 8 PM EST last Friday, marking a reduction in the issuance rate of newly mined bitcoin to 3.125.

Despite anticipation for a significant rally following the halving, bitcoin investors were met with disappointment as the week ended on a slightly bearish note, with the asset slipping 2% to close the Friday daily candle near $63,850, down from an opening of $65,200.

Notably, however, bitcoin outperformed traditional equity indices, with the Nasdaq experiencing a steeper decline at -5.34% for the week. Amidst the predominantly bullish atmosphere surrounding the halving, geopolitical tensions in the Middle East added volatility, particularly on Friday, coinciding with close to a $9000 price rollercoaster.

Geopolitical Headwinds Roar On

The world held its breath as Israel contemplated its response to Iran’s previous weekend attack. Uncertainty loomed regarding the timing and magnitude of retaliation and how global powers would perceive such actions. Early Friday saw market turbulence as Israel targeted multiple military sites, causing bitcoin to plummet from a pre-market high of $63,500 to dip below the critical $60,000 support briefly, hitting a low of around $59,600 — a staggering $3500 or -5.5% drop within an hour.

However, as the news settled, it became evident that the retaliation was relatively measured. It allowed bitcoin to swiftly rebound and reclaim all losses, surging to $65,500 in a v-shaped recovery, marking a remarkable $9000 rollercoaster ride within two hours. This volatility triggered liquidations of leveraged positions totaling $280 million, impacting both longs and shorts alike.

ETF Flows

Spot ETF flows extended their downward trend from the previous week, ending on a negative note with over $2 billion in outflows. However, Friday marked a break in the five-day losing streak, possibly indicating bitcoin’s perception as a safe-haven asset amid global conflict.

Friday saw $60 million in inflows, contrasting with the Nasdaq 100’s bearish tone, declining over -2%. Overall, net assets have decreased by approximately $6 billion from their March peak of $61 billion, currently resting at $53.83 billion.

Rune’s Impact on BTC Future Price

The surge in transaction fees driven by the Runes protocol launch could carry implications for bitcoin’s price trajectory. The record-high transaction fees indicate heightened demand for utilizing the bitcoin network, reflecting increased interest and activity within the ecosystem.

This heightened demand, coupled with the scarcity enforced by the halving events, could lead to upward pressure on bitcoin’s price in the long term. As transaction fees become a more substantial component of miner revenue, this could potentially contribute to sustained price appreciation as the network continues to grow and evolve.

Bitcoin Balance On Exchanges

A notable discrepancy is emerging between bitcoin’s price and the total balance of BTC on exchanges. While the price has remained stagnant or declined, the balance on exchanges has consistently decreased, reaching record-low levels for the year.

This decline in exchange balances suggests that traders are transferring their bitcoin off exchanges and into personal wallets, likely with the intention of long-term holding. Despite the downward price trend, this divergence may signal that the current consolidation phase is actually a period of accumulation before a potential upward movement in the future.

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