Is Bitcoin Preparing for a Halving Pump?
The past week is very hard for the Bitcoin investors and the largest cryptocurrency lost more than 50% of its value. Bitcoin is now trading at $6600 and struggling to defend the $6000 support zone. The cryptocurrency market is not the only one affected by the recent coronavirus (COVID-19) panic, the stock market and commodities markets also tanked in the last week.
Bitcoin halving is coming in 2 months and the crypto community is very optimistic about it. Bitcoin halving is the event occurs after every 210,000 blocks (Approx 4 years). The reward per block is reduced to 6.25 BTC from 12.5 BTC after the halving.
Bitcoin Market Bottomed?
Everyone is asking the question is the Bitcoin market bottomed or we have still room for one more drop?
Bitcoin price is dumped hard from $7900 and made a low of $3700 on 13 March 2020 and the leading cryptocurrency derivative exchange Bitmex has reported hardware problems on the same day. The market is full of panic and investors are still confused in which direction the market will go.
The veteran trader and analyst Tone Vays said in his Youtube video that Bitcoin price will not go below $2000 even if there is a panic sell happen. In the video, he further added that the Bitcoin market needs around 80% correctio before starting the new bull run that set the target price of $2800. The $2800 zone may possible before the Bitcoin halving that is predicated to happen around 12 May 2020.
The next few weeks are very crucial for the Bitcoin market if Bitcoin able to hold the $6000 support zone then investors get some confidence and push the price higher.
Is this Dump necessary for the Halving Rally?
According to the bitcoin blockchain data, the hashrate and difficulty of the bitcoin network are continuously rising which means new miners and hardware is added to the network. After the price drop, many small miners stop mining because the cost of mining is high then the price of Bitcoin and small miners can’t afford to mine Bitcoin in a loss. The big miners continue to mine Bitcoin even in a loss for the long term because they have a stash of Bitcoin. This will give the big miners a chance to grab the maximum share of Bitcoin mined before the halving.
The hashrate of Bitcoin falls around 20% after the dump and the next difficulty adjustment is also around -4% that shows that some miners already started shut down their equipment.
This is the financial situation bitcoin is made for and the halving will reduce the newly generated coins by 50% (simply the selling pressure). The cost of mining Bitcoin after the halving is increased because the reward is reduced by 50% so the price needs to increase to support miners and eventually the bitcoin network. The Bitcoin market is ready for a massive bull run after the halving.
