So far there have been 2 halving events in the history of bitcoin. By nature, halving decreases the future supply of Bitcoin and thus fuels an increase in price, if demand remains or increases.
Looking at the previous halving event back in 2012, it fueled the 1st bitcoin bubble. Back then the price increased by about 100 times (10 USD - 1k USD).
Now, after the second halving (2016), the price increased by about 40 times, 400/500 - 20k USD, so far. Will it continue from here or is this the end?
I think there are 2 possible scenarios based on the previous halving pump of 2012:
BULLISH:
Scenario A: Bitcoin retraces more than 70% (260 to 60) then increases by about 16 times (up to 1,100 USD) in a span of 1 year.
Scenario A repeats now: Bitcoin retraces 70% (20k-6k) and increases by about 16 times (up to 100,000 USD) in a span of 1 year.
BEARISH:
Scenario B: Bitcoin continues to retrace from here up to 85-90% (1,100 to 150) and bear market continues for almost 2 years and reverses next halving (2014-2016).
Scenario B repeats now: Bitcoin continues to retrace from here up to 85-90% (20k to 2-3k) and bear market continues for almost 2 years and reverses next halving (2018-2020).
Closing:
Market conditions then greatly differ from what we have now. The current market is a lot bigger, so what happened in 2012 may not happen ever again.
But market behavior towards the halving event will likely be similar no matter how huge the cryptocurrency market becomes.
Decreasing supply paired with increasing demand leads to increase in price.
As long as people keep buying bitcoin, halving events will inevitably lead to an increase in price.
Overall, I believe BTC can break all time high in the future. If it will happen this year or the next 2 years only time will tell.
Looking at the previous halving event back in 2012, it fueled the 1st bitcoin bubble. Back then the price increased by about 100 times (10 USD - 1k USD).
Now, after the second halving (2016), the price increased by about 40 times, 400/500 - 20k USD, so far. Will it continue from here or is this the end?
I think there are 2 possible scenarios based on the previous halving pump of 2012:
BULLISH:
Scenario A: Bitcoin retraces more than 70% (260 to 60) then increases by about 16 times (up to 1,100 USD) in a span of 1 year.
Scenario A repeats now: Bitcoin retraces 70% (20k-6k) and increases by about 16 times (up to 100,000 USD) in a span of 1 year.
BEARISH:
Scenario B: Bitcoin continues to retrace from here up to 85-90% (1,100 to 150) and bear market continues for almost 2 years and reverses next halving (2014-2016).
Scenario B repeats now: Bitcoin continues to retrace from here up to 85-90% (20k to 2-3k) and bear market continues for almost 2 years and reverses next halving (2018-2020).
Closing:
Market conditions then greatly differ from what we have now. The current market is a lot bigger, so what happened in 2012 may not happen ever again.
But market behavior towards the halving event will likely be similar no matter how huge the cryptocurrency market becomes.
Decreasing supply paired with increasing demand leads to increase in price.
As long as people keep buying bitcoin, halving events will inevitably lead to an increase in price.
Overall, I believe BTC can break all time high in the future. If it will happen this year or the next 2 years only time will tell.