Some have predicted a “sell the news” type drop will hit bitcoin following the May 12 event. The dire prediction comes a week after bitcoin rose to the highest in more than two months. Traders and analysts cited growing demand for bitcoin before its latest halving.
The event will mean a 50 percent cut in the production of the cryptocurrency.
The halving is one of the few observable events known to materially impact price.
A rule written into decentralised digital currency’s underlying code slashes the number of new coins awarded to the miners behind the global supply of bitcoin.
A halving occurs once every four years and previous events were triggered in 2012 and 2016.
Bitcoin is the top listed asset on crypto market data provider CoinMarketCap.
Because it is a deflationary currency due to its unalterable monetary policy, anything that affects bitcoin’s supply is sure to have an impact on its price sooner or later.
While some experts have predicted a fall in price after next week’s halving, others foresee a bullish continuation of its recent performance.
Last Thursday bitcoin’s price exploded to more than two-month highs.
As of 7.03am it had gained as much as 18.57 percent to $9,388 (£7,555).
But as always, the underlying reasons could only be speculated.
The stock market experienced a rally after it emerged a possible treatment for coronavirus could come sooner than later.
The correlation between the stock market and the price of bitcoin during the pandemic was once again made plain obvious.
If a market dump does not happen after the halving bitcoin’s price could reached new highs.
Crypto trader Galaxy published a chart laying out predictions.
They said if it breaks out of the $9,500 to $9,900 resistance area it could surge.
They said: “The fact that BTC is going to $13K simply cannot be ignored.”
Published at Mon, 04 May 2020 14:01:00 +0000