The halvening is just around the corner, when bitcoin mining block rewards will be cut in half, to 6.25 bitcoins per block. Investors are speculating on the impact of this event on bitcoin prices, both in the long term, and in the short term. Right now, we’re seeing volatility leading up to the event, but why is this, and what will happen afterwards?
Historic Resistance Triggered Trading Bot Dumps
Historically, bitcoin has faced resistance between $10,200 and $10,500. When it finally did break through the $10,500 barrier in June 2019, it soared to $14,000. Other than that, it tested the $10k range and failed five out of six times since 2018. In this last run, bitcoin failed to surpass $10,100, which signaled rejection. As a result, trading bots and seasoned bitcoin traders started dumping at $9,900. This drove the price down and within one hour, over $200M worth of bitcoin was sold.
Bitcoin Halving and Price Volatility
The halvening is expected to occur on May 12, 2020. When this happens, it’s possible that we could see a bitcoin breakout. But it’s also possible that bitcoin will tank even further. Generally, it could be a time of high volatility, and smart traders will find ways to profit. Based on the current economy and the COVID-19 lockdown’s effects on it, it’s possible that many people dumped bitcoin in anticipation of a major drop in value.
Bitcoin Price Correction
It’s also possible that what we’re seeing now is simply a correction. Some technical analysts are suggesting that we are close to the real value of Bitcoin. If that is the case, then this might be a buy signal, after a 55-day rally during a pandemic. This could be healthy consolidation where the bears can exhaust themselves, in preparation for another bull run.
Follow Crypto News Websites
There’s no way to know for sure what will happen. But you can hedge your bets by following the latest crypto news websites.