Bitcoin Halving Hype Could Give Way to Consolidation or Retracement, But what about Altcoins?
Just four days away from halving, we have some interesting next few weeks ahead of us.
The world's leading digital asset is already enjoying an uptrend, currently trading above $9,800, breaking off its relation with equities after the correlation between them reached a peak during the past couple of months. This short pump is rolling off the news of $38.4 Billion hedge fund manager Paul Tudor Jones saying that he will invest a single percent into Bitcoin.
Trader Cantering Clark is expecting S&P 500 to “suffer a bit of altitude sickness up here from a demand standpoint,” as the thing starts going back to normal and approaches “Sell in May and go away” that means “most observed growth in equities occurring between November – April.”
Bitcoin halving on social media
In these last few days leading up to halving, bitcoin-related sentiments that were “sky-high” on most social media channels in the last week’s run-up to $9,000, the mood has cooled down, reports Santiment.
The trend is most visible on Telegram, which recorded a 3-month high only to decline dramatically since BTC’s move above $9k.
Other social channels are reflecting the same pattern. Major crypto subreddits that have been growing “increasingly confident” in Bitcoin since Black Thursday have made a complete 180 and now are firmly in the “ambivalent territory.”
Over the last month, Bitcoin-related sentiment recorded the largest spike on Twitter which is also seeing a steady decline in the bullish overtones since the $9,000 pump.
“The crowd appears deeply divided on the impact of the halvening, its size and direction,” reported Santiment. “At this point, I’d say the bears are just inching out the bulls. But the momentum definitely feels on the side of the bears.”
I'm not saying the halving won't affect price at all. I just don't think 900 fewer bitcoins per day is that big a deal.
To me, the halving should be a celebration of Bitcoin's monetary policy, its soundness, its freedom from the whims of central bankers.
Not a "wen moon" party.
— Jake Chervinsky (@jchervinsky) May 6, 2020
Now, the facts
The market is eagerly waiting for this third reward halving which the last two times led to bull rallies. As such, everyone is focused on this event that will cut down miners’ revenue into half while the bitcoin network remains strong as ever with all-time high hash rate and difficulty which is near its peak.
But that is to be expected as the analyst with pseudonym Rekt Capital points out, “Investors buy the hype weeks before every Halving.”
Further pointing out the bitcoin halving facts based on previous halvings, he noted that bitcoin retraced on the week of the last two halvings.
After the first halving in 2012, bitcoin consolidated for over a month before rallying, and following 2016 halving, bitcoin retraced and took weeks to recover before it rallied again.
What about altcoins?
Ahead of halving, Bitcoin’s market cap dominance continues to rise, climbing to 75.98%, as per Messari. This jump in BTC’s dominance means altcoins will “feel a lot of pain across the board.”
BTC.D back above the 200DEMA
A&E almost complete pic.twitter.com/DMUIYUP09T
— Josh Olszewicz (@CarpeNoctom) May 6, 2020
Already while bitcoin is enjoying a rally, having spiked to $9,800, altcoins are suffering.
“BTC is rallying strongly with only a few days left until the Bitcoin Halving. Unsurprisingly, most of the attention is on BTC which is why capital is flowing away from Altcoins,” said the analyst Rekt Capital.
What this means is that “altcoins will have retraced to attractive prices ahead of their Q2 Hype Cycle.”