Bitcoin Turns 12 Since First Halving, Bulls Eye $100K Again
BTC Pulls Back After Hitting $99,800 ATH. Was This Retracement Enough?
On November 28, 2012, Bitcoin went through its first ever halving so we could say that halved Bitcoin is 12 years old (and a day). At that time, block rewards were reduced from 50 Bitcoin to 25 Bitcoin and the apex cryptocurrency went through three more halving events, with the most recent happening in April of this year.
Usually, each halving is followed by an increase in price, which was also the case this year, although the extent was somewhat limited. The lower rewards received for each block translate in fewer Bitcoin being mined, which means lower overall supply. And according to the laws of supply and demand, when supply is low, the price goes up.
Not only the reward for each block went down, but the difficulty went up during all the years since the first halving. On November 5, Bitcoin mining difficulty rate went over 100 for the first time and is currently sitting at 102.3. The difficulty increases every 2016 blocks (which translates roughly into 2 weeks), with the next increase estimated to occur on December 2.
Low rewards, high difficulty… well, at least Bitcoin’s price is helping miners stay in business by going up. The price increased more than 150% this year and the market cap of all publicly traded mining companies is approaching $40 billion. At the time of the latest halving, in April, their combined market cap was just $20 billion.
There are still 1.2 million Bitcoin left to mine until the 21 million supply is completely depleted and these will be some of the hardest coins to mine.
Chart Analysis – BTC/USD
On November 22, Bitcoin reached its All-Time High at $99,800 and started a much needed pullback. The move lower was expected due to the huge climb from $67K to nearly $100K that was done in a very short time and almost in a straight line up. The RSI was severely overbought and showing bearish divergence and profit-taking was expected after such a climb.
After breaking the previous high at $73K, Bitcoin did not have any support and resistance levels that could make price react. Now, the recent drop has revealed $90,700 as support because that is where the most recent bounce occurred. Currently, Bitcoin is trading around $96K, which is roughly in the middle of the range created by this support and the ATH.
At this time, the main bias is clearly bullish but it remains to be seen if the pullback from the ATH to $90,700 was enough to allow the bulls to step in and break the top.
