Set for 12 May 2020, the Bitcoin halving is just 105 days away. Bitcoin price is steady at 8K-9K level.
However, we should note that the same figure was named last week. Despite the fact that time is going forward, the halving event is not getting closer according to popular countdowns. It may be evidence of the decreased hash rate.
Arcane Research, a Norwegian Cryptocurrency analytics company, published a study showing the growing demand among people who search in Google for ‘bitcoin halving’. Google Trends shows that people are doubling their interest in the topic in last month. The number of searches is even higher than in 2016 when people first started researching the tech aspects of the event.
The report says that ”here is now a clear indication that awareness of the concept is spreading to new people”.
Tom Lee from Fundstrat says that 2020 will be the major year for Bitcoin. In his recent interview, he narrowed the Bitcoin price in the bullish direction. He claims political instability, Eastern problems, and the upcoming Bitcoin halving is the key factors to consider.
Travis Kling, who is working in the cryptocurrency analytics firm Ikigai, claims that Bitcoin will jump in the price in May 2020 – exactly when the halving will occur:
“Five years of trend lines perfectly coinciding with the most highly anticipated event in BTC history. Fireworks in store!”
Travis presents the graph where the diagonal resistance and diagonal support meet each other approximately in May 2020. The block reward given to the miners will decrease from 12.5 to 6.25 BTC. It is expected, according to the law of rarity, that Bitcoin’s price must rise after the event.
Negative Scenario Is Purely Possible Thanks to ‘Weak Hands’
However, there is a possibility of downtrend too. Some of the large miners may want to dump the previously mined coins because the cost of producing the new ones will increase two-fold. The speculators playing longs against the bull market after the halving is a big reason to bet on the price fall. Also, shortlists can force over-leveraged longs to close their trades.
Such a negative scenario happened during the second halving. Back then, Bitcoin lost 1/3 of its price, moving from $663 to $465 in no time. Tradingview commented this as ”weak hands shaking off the coins”. Kiril Nikolaev of CCN thinks that the downfall to $5,500 per bitcoin is possible in case the bear run happens after the halving.
Jeff Fawkes is a seasoned investment professional and a crypto analyst covering the blockchain space. He has a dual degree in Business Administration and Creative Writing and is passionate when it comes to how technology impacts our society.