Bitcoin Halving Is 2 Months Away while Bitcoin Price Is Below $8,000

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Wanguba Muriuki
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Everyone in the crypto world is aware that the third Bitcoin halving event will take place sometime in May. According to several analysts, it could be the needed spark that will ignite a crypto bull market. Interestingly, others also say that it will drop the token’s inflation rate lower than central banks’ 2% target reference.

After every 210,000 mined blocks on the Bitcoin blockchain, the token undergoes a halving. This time, the block rewards for the miners will get slashed from 12.5BTC to 6.25BTC. During its entire 11-year history, Bitcoin has encountered two halving events that happened in 2012 and 2016.

BTC price exploded on both of the previous occasions to a new all-time high within 12 months. The latest surge came in December 2017 when it reached $20,000. Now, many investors wonder whether these price performances will repeat.

More than two years after reaching its all-time high, Bitcoin continues to hover around $8,000. This price level may provide a perfect springboard during the halving season. The theory is that supply in the market will reduce as the rewards for the miners are decreased, resulting in price gains.

The Global Market

Nevertheless, halving is not the only major event that may introduce a crypto bull market. The widespread coronavirus that is sending shockwaves across the global markets may eventually result in price gains.

Oil prices crashed by over 20% while the stock market indexes slid by up to 10% and the treasury yields performed dismally. These losses prompted investors to seek haven investments like gold and bitcoin.

Historically, gold has acted as a hedge to the financial system with the price hikes happening during major global events like the 2008 financial crisis. The precious metal continued to act as a haven for investors reaching a seven-year high of $1,700 per ounce last week.

Gold is undoubtedly performing well at this time of global uncertainty. That might be a good sign for Bitcoin over the coming few months with the block rewarding event fast approaching.

The primary price targets for Bitcoin are set at $13,200 and $20,000. However, another bull market resembling the one that happened in 2017 may drive the BTC price to astonishing all-time highs.

Interest in Bitcoin Halving Dwindling in the U.S.

Google Trends reveals that the U.S. interest in the Bitcoin halving event is dropping with just weeks to go. Since the search engine is the first port of call for many people when they seek information on any topic, this metric can offer valuable insight into how the people outside Reddit and Twitter feel about Bitcoin.

Is it an early sign that the price may not hit high levels as expected? According to Joe Weisenthal, the searches for both “halving” and “halvening” are plunging within the United States. Also, there is a similar fall in search of the term “Bitcoin halving.” But, searches for “Bitcoin halvening” are actually increasing in the U.S.

Weisenthal said that the search volume had plummeted weeks before the halving. Although he may not be explicit, he appears to suggest that this halving might attract less interest, indicating that the widely expected post-halving-pump may struggle to deliver.

Bitcoin Price Trend

On March 10, the BTC price took a bullish turn as the token soared to $8,150 before fighting resistance that saw it drop back to $7,730. Also, the S&P 500 and Dow went on a similar trajectory by rising at the opening bell before pulling back steeply in the afternoon session. Both indexes rallied into the close after details emerged that President Trump wishes to shore up the U.S. economy.

Mohammed El-Erian, economist and Allianz chief economic officer, cautioned investors against buying the current dips in the markets since the continuous spread of the coronavirus in Europe and the U.S. is taking a toll on the global market sentiment. Crypto investors who believe that Bitcoin is a store of value and hedge against traditional market volatility are now watching the current market situation.

In the last two weeks, Bitcoin has followed the traditional markets dropping violently as well. But, Skew data shows that Bitcoin returns are still up around 9.45% this year, while S&P 500 has dropped by 10.79%.

Bitcoin is no longer a non-correlated asset. It's positively correlated to risk assets like equities, and negatively correlated to safe-haven assets like #gold. When risk assets go down, #Bitcoin goes down more. But when risk assets go up, Bitcoin goes up less. No value in that!

— Peter Schiff (@PeterSchiff) March 10, 2020

Technical Analysis

For now, the BTC price is consolidating below the 61.8% Fibonacci retracement level ($7,978). If the price manages to turn the $8,120 and the $8,200 resistances to supports, the price may surge to $8,600 according to the volume profile visible range (VPVR).

The moving average convergence divergence (MACD) histogram keeps rising closer to 0 based on the 6-hour chart as the buying volume increases with Bitcoin registering higher lows. Eventually, the bullish trend will depend on the purchasing volume. But, buyers might not buy crypto until the traditional markets stabilize or Coronavirus stops spreading rapidly in the US and Europe.

The MACD has flattened and started rising toward the signal line. The VPVR nodes from $8,600 to $8,820 have now aligned with the descending trendline and prevented a high volume breakout. Bitcoin might struggle trying to make a daily higher high past $8,750.

If the BTC price rallies to $8,500-$8,600, investors would open short positions there being aware of the overhead resistance. They might also go short since $8,500 has been a crucial price level for Bitcoin.

At the time of writing, BTC is trading at $7,817, losing about 1.27% for the day.

Author: Wanguba Muriuki

Wanguba Muriuki is a content crafter passionate about putting everything into writing. He is passionate about Blockchain and Traveling. He is also an experienced creative and technical writer. Everything and everyone has a story to tell. What better way to capture the real story than in words.

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