The chances of an end of year ‘Santa rally’ for Bitcoin are slipping away. Its half year down trend has been maintained and does not look like reversing before the year is out. All hopes are now being pinned on the BTC halving in May next year, but will it really be the lifeline everyone wants?
Bitcoin Dumps Again
A couple of hours ago Bitcoin fell out of its three day consolidation channel and dumped to $7,100 according to Tradingview.com. At the time of writing it was trading just above this level but poised to drop into the high $6k region once again. The move marks a 3% loss on the day.
Bitcoin has lost almost 8% since the weekend and the down trend is strengthening. Analysts are all now in agreement that $6k is the next level where things may settle down for a while and this is likely to come before the end of the year.
This leaves all remaining hope on the BTC halving event which is due on May 14 according to the countdown. The halving heralds a number of bullish factors which include a reduced number of coins added to the total supply which increases the notion of scarcity.
As block rewards fall from 12.5 to 6.25 BTC the asset’s inflation rate also falls below the central bank target of 2%. Bitcoin inflation will be 1.8% and with 18 million, or 86% of them, already mined that scarcity concept should drive demand.
Previous halvings in 2012 and 2016 saw Bitcoin prices rising after the event, not before. As industry analyst ‘PlanB’ points out it did not take over a year for the market to start surging.
“Well, it didn’t … look for yourself: in the chart the halving is when blue turns to red: the market immediately rises after a halving”
Getting some questions about why in previous halvings (November 2012 and July 2016) it took well over a year for the market to start surging..
Well, it didn’t .. look for yourself: in the chart the halving is when blue turns to red: the market immediately rises after a halving
If history is to rhyme then markets should start gaining in mid-2020. The analyst added that the rise was slower in 2016-2017 because altcoins and ICO’s were stealing a bit of the thunder, but that is not going to happen in 2020.