If History Rhymes Bitcoin Could See a Major Post-Halving Crash
#crypto #bitcoin
Bitcoin’s highly anticipated mining rewards halving is only eight days away, and cryptocurrency investors have long been debating what the short-term impacts of this event will be. In the long-term it is unquestionably bullish due to it causing a 50% annual inflation reduction for BTC, but the short-term impacts are highly speculative, and limited data sets make it hard to look towards historical precedent for guidance. One analyst is noting, however, that the event is typically followed by a sharp selloff following its conclusion, a sign that the ongoing BTC rally may ultimately prove to be fleeting. Data Signals That Anticipation for Bitcoin’s Halving is Growing at a Rapid Rate Bitcoin’s rally seen in the time following its sharp mid-March meltdown has been attributed by some investors to growing anticipation for the mining rewards halving. It is important to note that although this may be a partial cause for the over 100% rebound seen throughout the past several weeks, it likely stems more from the massive technical strength formed as a result of the “V-shaped” recovery seen in the days following its decline to lows of $3,800. Nevertheless, volume data from Google Trends regarding the search term “Bitcoin Halving” does suggest that there is significant global interest in this event. Image via Google Trends As seen in the above chart, it appears that search volume for this term began turning parabolic in early-April and is showing no signs of slowing down as the event fast approaches. The interest in this event is rooted primarily in its potential short-term impacts on the cryptocurrency’s price. One popular Bitcoin proponent named PlanB recently spoke about how the halving’s timing relates to his extremely popular – and controversial – Stock-to-Flow Model, which predicts that BTC will begin ascending up towards $100,000 in the time shortly following this event. “Chart update: Bitcoin halving May 12… so it begins,” he said while pointing to the chart seen below. Image Courtesy of PlanB Halving May Be Followed by Brutal Selloff Despite PlanB’s S2F model predicting that Bitcoin will begin another parabolic rally in the months ahead, history seems to suggest that BTC will see a brutal post-halving selloff. One popular crypto analyst on Twitter spoke about this in a recent post on Twitter, explaining that historically BTC has seen notable selloffs in the 1-2 months following the mining rewards halving. “For those who is going through their first Bitcoin halving, congratulations, you made it… Historically, BTC price tends to dump in the first 1-2 months post halving. History repeats itself?” Although Bitcoin has only seen two halving events prior to this one and the sample size is too small to gain any conclusive trends from, it’s possible that a lack of any immense bullishness around the time it takes place will lead to great disappointment amongst speculators. Featured image from Unplash.
OhNoCrypto
via https://www.ohnocrypto.com
Cole Petersen, Khareem Sudlow
Bitcoin’s highly anticipated mining rewards halving is only eight days away, and cryptocurrency investors have long been debating what the short-term impacts of this event will be. In the long-term it is unquestionably bullish due to it causing a 50% annual inflation reduction for BTC, but the short-term impacts are highly speculative, and limited data sets make it hard to look towards historical precedent for guidance. One analyst is noting, however, that the event is typically followed by a sharp selloff following its conclusion, a sign that the ongoing BTC rally may ultimately prove to be fleeting. Data Signals That Anticipation for Bitcoin’s Halving is Growing at a Rapid Rate Bitcoin’s rally seen in the time following its sharp mid-March meltdown has been attributed by some investors to growing anticipation for the mining rewards halving. It is important to note that although this may be a partial cause for the over 100% rebound seen throughout the past several weeks, it likely stems more from the massive technical strength formed as a result of the “V-shaped” recovery seen in the days following its decline to lows of $3,800. Nevertheless, volume data from Google Trends regarding the search term “Bitcoin Halving” does suggest that there is significant global interest in this event. Image via Google Trends As seen in the above chart, it appears that search volume for this term began turning parabolic in early-April and is showing no signs of slowing down as the event fast approaches. The interest in this event is rooted primarily in its potential short-term impacts on the cryptocurrency’s price. One popular Bitcoin proponent named PlanB recently spoke about how the halving’s timing relates to his extremely popular – and controversial – Stock-to-Flow Model, which predicts that BTC will begin ascending up towards $100,000 in the time shortly following this event. “Chart update: Bitcoin halving May 12… so it begins,” he said while pointing to the chart seen below. Image Courtesy of PlanB Halving May Be Followed by Brutal Selloff Despite PlanB’s S2F model predicting that Bitcoin will begin another parabolic rally in the months ahead, history seems to suggest that BTC will see a brutal post-halving selloff. One popular crypto analyst on Twitter spoke about this in a recent post on Twitter, explaining that historically BTC has seen notable selloffs in the 1-2 months following the mining rewards halving. “For those who is going through their first Bitcoin halving, congratulations, you made it… Historically, BTC price tends to dump in the first 1-2 months post halving. History repeats itself?” Although Bitcoin has only seen two halving events prior to this one and the sample size is too small to gain any conclusive trends from, it’s possible that a lack of any immense bullishness around the time it takes place will lead to great disappointment amongst speculators. Featured image from Unplash.
OhNoCrypto
via https://www.ohnocrypto.com
Cole Petersen, Khareem Sudlow