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Bitcoin halving is almost here. Will it moon ?

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
It is always a debate on what Bitcoin will do in terms of pricing for a halving event. Some people believe that the halving is already priced in by the market and thus there's no expectation for the price to do anything. Others believe that due to price equilibrium, a halving of supply should cause an increase in price if demand for Bitcoins is equal or greater than what it was before the halving event. Let’s look into it.

BTC is expected to undergo Halving during this week, where the rewards for mining a block will be reduced.
This is the last chance for miners to get 12.5 BTC per block, as the rewards will be squashed to 6.25 BTC post halving.
The majority of miners can sustain the 6000 to 7000 price per BTC now as the rewards are high however post halving they become unprofitable.
That’s why we should expect 10,000 – 11,000 as It appears to be the sweet spot for over 70% of the miners to stay in the business.

Hash Rate has been peaking, moving towards the ATH during the pre halving increase of the BTC price. We’ve had a similar scenario on both the first (2012) and the second (2016) halving.
On 2016 we’ve had a 33% Pre-Halving increase of the hash rate as it went from 1.2EH/s to 1.6EH/s
The interesting part that we have to take into consideration is the post halving effect. On 2016, a month after halving the H/R started to decline, going from 1.6 EH/s to 1.4EH/s, as the miners who weren’t profitable after the reduction of the rewards per block did go out of business.

This has an effect on the BTC price too, as on 2016 the price peaked at $768, and it went down post halving at around $552.
We should be expecting similar effects of 2016 during this years halving.

From the technical standpoint we did had a pretty intense week.

9500 Weekly Resistance is being respected to the Tee. BTC broke through it, however it never succeeded on closing above it as the price immediately reversed back inside that zone.

Just above this level there’s a liquidation area between 10,000 – 10,500, as you can see on the charts there are many spikes and reversals from this level, which tells us that this is a level where institutions and whales had their sell orders placed. And this might be the reason we are facing numerous of reversals upon hitting this price.

The weekly descending trend-line that has been respected since June 2019 is sitting just below the 9500 resistance. If you combine the trend-line with the chart you can tell that regardless of the current price rally we’re still on a down trend and have been forming lower highs and lower lows since July 2019.

On the daily time-frame the key levels mentioned on the last analysis are still holding up well even though we anticipated a huge break towards 10000 (liquidation area on the weekly), BTC still came back inside the critical area between 8500 and 9500.

On the weekly time-frame this area is in-between 61.8% and 78,6% FIB Ratios – Known as the golden ratios where the majority of the reversals take place.

So Technically, we are still in a downtrend and the price is being traded at a region where the reversals to the downside might take place at any moment. But, knowing that fundamentally we are 200 blocks away from the third halving we should be seeing a temporary price jump, this would only be temporarily unless a massive FOMO kicks in and we break above the key levels mentioned above – thus, changing the direction of the trend

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Comments

thanks for the write up.
+1 Reply
excellent analysis
+1 Reply
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