While bitcoin is still ranging, I would like to speculate what to expect from the approaching halving of the block reward event and how it was last time.
November 28, 2012
The first Bitcoin halving takes place to reduce mining rewards to 25 BTC
As you can see on the chart below bitcoin price experienced two falls (40% and 25%) prior to date. After the Halving BTC didn't fall that deep and went straight up after 50 days.
July 9, 2016
Second halving takes mining reward down to 12.5 BTC.
Two months prior to halving, Bitcoin managed to grow by 75% and fall by 23%. And after 22 days from the event's date, it falls 30%. After that, the price only climbed up.
May 12, 2020
About year to date, the price was in some sort of big channel and sharply dropped by ~57% due to coronavirus outbreak about 70th days ago.
So, what can we expect?
We can expect the second drop after about a month or less after the halving, like in 2016, i.e 'sell-the-news' reaction.
High volatility - like a pump to $10300 (high channel boundary) and dump to $7200 (lower).
Confident further growth only after 2+ months after the halving
It needs to remember, all the above is just speculation, and bitcoin can easily fly to the moon or dump to the ground on the 12th of May, but having the information about previous events could help to prepare for a new one.
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Information is just for educational purposes, never financial advice. Always do your own research.
I think this halvening will be the first where the impact of it will be minimal. And future halvenings will have lesser and lesser effect.
The reality is that daily sell supply of BTC is going from 1800 to 900 this halvening.
Compare that to a drop of 3600 to 1800 last halvening. Twice the reduction in daily supply last time.
This is by design of course.
And yes, we always see a bit of a dump post-halvening.
I think it typically correlates with the amount of hype pre-halvening, because FOMO retailers think "MOON!" when in fact halvenings effect 1) doesnt start until 1-2 months AFTER halvening; and 2) halvening doesnt actually imply btc is worth more.....(this is the most common misunderstanding of it)
If the current pump we had last week is pre-halvening FOMO (which I think it was); then we will be seeing a bigger dump post-halvening (unless we correct before then).
Which IMO is not good.
I want more adoption of bitcoin, and I can see allot of people leaving bitcoin who joined pre-halvening, see their btc dump 50%, then leave and never come back.
This is the single worst thing about crypto markets and its because of the whales of course. They are harming the market in so many ways and making it so much harder to grow to where we should be.
If crypto fails it will be because of the speculator whales who ruined it and too many people just said "no thanks!" to this entire market. We are still at risk of that happening => btc $0
Bitduke
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@ezpi, mostly agree. As for the price increase (if any), I think that the effect will be less than the previous one (and before the previous); if we can, of course, draw such conclusions on just two events.
The reality is that daily sell supply of BTC is going from 1800 to 900 this halvening.
Compare that to a drop of 3600 to 1800 last halvening. Twice the reduction in daily supply last time.
This is by design of course.
And yes, we always see a bit of a dump post-halvening.
I think it typically correlates with the amount of hype pre-halvening, because FOMO retailers think "MOON!" when in fact halvenings effect 1) doesnt start until 1-2 months AFTER halvening; and 2) halvening doesnt actually imply btc is worth more.....(this is the most common misunderstanding of it)
If the current pump we had last week is pre-halvening FOMO (which I think it was); then we will be seeing a bigger dump post-halvening (unless we correct before then).
Which IMO is not good.
I want more adoption of bitcoin, and I can see allot of people leaving bitcoin who joined pre-halvening, see their btc dump 50%, then leave and never come back.
This is the single worst thing about crypto markets and its because of the whales of course. They are harming the market in so many ways and making it so much harder to grow to where we should be.
If crypto fails it will be because of the speculator whales who ruined it and too many people just said "no thanks!" to this entire market. We are still at risk of that happening => btc $0