Bitcoin, VOC, Voice of Crypto
Historically, Bitcoin's price has increased significantly after halving events.
While historical trends suggest a price surge, it may not be as dramatic this time.
This is because the block reward for mining Bitcoin will be reduced, potentially impacting miners' revenue.
Moreover, geopolitical and economic factors may affect investor confidence in Bitcoin.
Analysts suggest watching price movements around $62,000 and $69,000, to determine whether Bitcoin crashes to $55,000 or hits $90,000
The crypto market hasn’t been this heated up in years.
The upcoming Bitcoin halving on 20 April is approaching as we speak and is only a few weeks away.
This halving event, which has always been a marker for the start of a new cycle, usually precedes Bitcoin price explosions that take the cryptocurrency up by several times its original value.
The question on everyone’s mind now is: will this halving echo the past and launch Bitcoin’s price to new heights?
If yes, by how much will we see Bitcoin soar?
Past halving events have always been dramatic events for Bitcoin’s price.
So much so, that even the whales accumulate massive amounts of the cryptocurrency in preparation for the ride to the upside, as highlighted by Ali Martinez here:
Accumulation by whales
According to Ali, the whales know what is about to happen, and have been buying around 21,400 $BTC, worth around $1.40 billion.
According to a recent report from Coingecko as well, Bitcoin has been displaying an interesting pattern.
According to the crypto data aggregation platform, Bitcoin rallies by an average of 3,230% after every halving as highlighted below:
Bitcoin’s gains after halvings
This pattern of growth has been a beacon of hope for investors, traders and the whales, who are now looking to the upcoming halving with a mix of excitement and hope.
However, there might be a problem with this.
The first thing to note about this arrangement is that Bitcoin currently trades at around $65,000 to $66,000.
This means that a rally of 3,230% would put the cryptocurrency at a cycle high of well over $2 million.
Not to be a wet blanket, but this figure seems slightly ridiculous. So much so, that even Coingecko in its report, stated that while a price increase is almost guaranteed, it might not be as "hard-hitting" as the past.
In detail, the market dynamics, as well as basic laws of diminishing returns indicate that we might not be seeing a repeat of these amazing price movements on Bitcoin as seen previously.
Moreover, the dynamics of the upcoming halving are set to present some challenges that could shape Bitcoin’s journey.
For example, the block halving is set to cut down Bitcoin rewards from around 6.25 Bitcoin per block to 3.125 Bitcoin per block.
This means that the reduction in block rewards may lead to a supply crunch, affecting the revenue generated by the miners and effectively hindering mining activity.
In turn, could place downward pressure on Bitcoin’s price.
Moreover, there are also issues with regulatory uncertainties, as more and more major economies are starting to scrutinize crypto, which could potentially dampen investor sentiment.
This goes without mentioning other economic factors like global currency devaluation, inflation and geopolitical tensions.
As of the time of writing, Bitcoin stands strong at around $66,200.93, per data from Coingecko.
So what are the price levels to watch out for?
According to a recent tweet from Ali, the flagship cryptocurrency (Bitcoin, left) is currently copying the Nasdaq chart (right) as shown below.
Bitcoin and the Nasdaq
However, Bitcoin might need a little push from here.
To validate this correlation Ali notes that the cryptocurrency will need to “swiftly recover” above $69,000, which might ultimately lead to a high of $90,000.
Time is of the essence though. If we see Bitcoin decline underneath the $62,000 zone, a massive crash is likely to follow, bringing the cryptocurrency to as low as $55,000.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.