Bitcoin Market Analysis: The Halvening, Don’t Forget About The Halvening …
Bitcoin Caught A Cold
Bitcoin and cryptocurrencies were not immune to the coronavirus pandemic. As global equities shed their 35%+ over the course of February and March so too did the world’s leading cryptocurrency. Bitcoin, down a staggering 62% in that time frame, has since hit bottom and bounced. The question now is, what can we expect from Bitcoin moving forward?
To start, Bitcoin has suffered numerous +50% declines in its lifetime so I don’t put too much emphasis on the size of the drop. Historically, each time BTC/USD sees such a decline it bounces right back and moves on to set new highs, if not all-time highs just yet. At this time, the BTC/USD is bouncing, has advanced 100% from its lows, and looks like it could go higher. Technically speaking, there is some risk at the short-term moving average so traders should beware.
The short-term 30-day EMA is providing resistance at this time. The EMA resistance is consistent with another resistance point ie previous support that was tested twice over the past 8-10 months. The indicators are consistent with a move higher but have not yet fired the strong signal. MACD is still hovering at the zero-line raising concern a bearish reversal is at hand.
The signal you should be looking for is the confirmation of resistance at this level, near $7825, or the break to new highs. The break to new highs is, I think, the stronger of the two signals but not guaranteed. Remember, this is cryptocurrency, the most fickle market I can think of.
The Halvening, It’s Here And I Bet You Forgot About It
One reason for Bitcoin’s massive rise from the pandemic-bottom is the halvening. The halvening is when Bitcoin’s block reward is cut in half, a move intended to reduce inflation and extend the mineable lifespan of the coin, and it’s only TWO WEEKs away! If Bitcoin experiences a bull-market induced by the halvening as so many of us expect the pandemic will be seen as one of the hottest buying opportunities this coin has ever seen.
In terms of dominance, Bitcoin is still dominating the market with a +60% share of the total value. The dominance has been holding steady above 60% for some time now and is expected to increase (by me) over the course of the year. For one, the halvening will attract new buyers like it always does. For another, coins like Tron and EOS are losing their users because they just don’t provide the utility their white papers promised. The hash-rate took a big hit during the sell-off but it too is bouncing back. Now only a small fraction below the all-time high it is clear the miners still love BTC.