2020-1-9 23:08 |
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The 2020 Bitcoin halving is fast approaching. Historically, the cryptocurrency has rallied to new local highs prior to the event and new all-time highs just after it.
After the halving, the supply of new Bitcoin released to miners every ten minutes will be cut in two. The 12.5 BTC rewarded with each block added to the blockchain will become 6.25. The event occurs every 210,000 blocks or about every four years. It will continue until the network has issued a total of 21,000,000 Bitcoin. There have been two prior halvings to date – one in 2012 and one in 2016.
Given the price action surrounding previous halvings, a lot of those with interests in the Bitcoin industry are anticipating the event to be a catalyst for new all-time highs once again. Unfortunately, with just two previous events to go on, there isn’t a lot of historical evidence. What does exist, however, is generally supportive of this reasoning.
As highlighted below by Bitcoin market analyst Rekt Capital (@rektcapital), the year of the halving typically sees a new market cycle top, which doesn’t exceed the prior all-time high, set in the months leading into the event itself. If this were to repeat, the new pre-halving top would be somewhere above $13,900 and below $20,000.
In the year of the Halving but still before the Halving, #Bitcoin has always reached a new high relative to the high of the previous year
Halving 1:
2012 – $7.40
2013 – $15.40
Halving 2
2015 – $504
2016 – $794
Halving 3
2019 – $13.900
2020 – ?https://t.co/4StGraQAaQ$BTC
— Rekt Capital (@rektcapital) January 8, 2020
Rekt Capital further analyzes the price action surrounding the 2012 and 2016 events in a Medium post in which they describe the halving as:
“… an event that guarantees legitimate scarcity.”
Although many analysts have been discussing the previous price action in relation to this halving, the “supply go down, number go up” narrative has not convinced everyone. As BeInCrypto reported earlier this week, a lot of the debate about the event’s impact on price centers around whether or not the market has already priced the halving in.
The likes of Coinmetrics.io founder Nic Carter makes a strong case for the Bitcoin market being efficient enough to price in known events like the halving. However, that isn’t to say Carter is overall bearish on Bitcoin into the future. Rather he realizes that if the Bitcoin market is as efficient as he believes, a sudden change in supply without an increase in demand will not result in higher prices. His overall future bullishness arises from the fact he foresees plenty more potential catalysts around the world to encourage people to buy into Bitcoin.
The post Bitcoin to Top $14,000 Before May, If History Repeats appeared first on BeInCrypto.
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