Bitcoin on the Move Towards $10k Just 5 Days Ahead of Halving, Preparing for a 2017-like Rally?
Bitcoin is back to rising today.
The world’s leading digital currency jumped as high as $9,400, up 5.12% on Bitstamp while managing the daily trading volume of $1.4 billion.
Currently, Bitcoin is still down 54% from its all-time high but has trended up 168% since its bottom in December 2019. Last month, BTC/USD spiked 34% that at one point even broke the US-based Coinbase exchange as it went down.
A daily close above $9,214 would be bullish. Breaking the descending black line would be more bullish. Breaking the purple line at $10,522 would be a higher high and would shut bears up for good. pic.twitter.com/YJFkrJu8Fq
— The Wolf Of All Streets (@scottmelker) May 6, 2020
All of this has been happening while we are just five days away from the third block reward halving.
“Narratives in the world of blockchain act like the Force in Star Wars — they mysteriously move and shape the market,” said George McDonaugh, co-founder of crypto investment firm KR1.
“You couldn’t be blamed for getting a little excited about what’s to come.”
The halving on May 12 will cut down miners' reward into half. In anticipation of this mania, crypto exchanges have been on a hiring spree as bitcoin added over $1.3 billion in value in just a month.
Come halving, the miner inflow will be reduced from 1800 BTC per day to 900 BTC per day. But this isn't’ the first time that halving is occurring. A regular event, this comes every four years and the third halving is set to occur next week.
Historically, halvings have led a bull rally. In 2021, BTC rose over 9,200%, and post 2016 halving, we had a 2,900% advance.
Now, it’s to be seen how this halving will fare. The network fundamentals have started growing, with the wallet growth spiking 2% in April, the largest monthly increase since November.
Besides the halving, this could also be because of bored, locked-down gamblers and sports-betters, as per Nicholas Colas of DataTrek Research.
Just last week, the hash rate of the network climbed to its peak which suggests miners are looking to catch most of the block rewards before the halving. But post-halving, nearly 30% of miners may get squeezed out because of the reward halving.
The network difficulty also adjusted higher to 16.10 trillion today, close to the all-time high of 16.55 trillion recorded in March.
This influx of activity resulted in the bitcoin fees jumping to $2.94, last seen in July 2019. Moreover, a massive backlog of bitcoin transactions is also awaiting confirmation.
Bitcoin Price Predictions
Meanwhile, Dan Morehead, CEO of Pantera Capital, sees the new peak in August 2021 at $115,212.
But Global Macro Investor’s Raoul Pal has even a higher target of $1 million in the next three- to five years.
“It is already the best performing asset in all recorded history. It was born out of the financial crisis for exactly what is about to come in this crisis. This is literally what Bitcoin was invented for,” Paul said recently.
I can not express how bullish I am on bitcoin. We are at risk of losing the entire system right now. I know they will find a way to save it but all trust is lost.
Gold guys/girls – you’ll be fine too. It’s just that $BTC has bigger upside, by far but is riskier than gold
— Raoul Pal (@RaoulGMI) March 19, 2020
Antoni Trenchev, co-founder of crypto-lender Nexo says bitcoin could reach $50,000 by year-end. Though the halving may be priced in, over time, it will lead to a huge appreciation, he said. Already, he is seeing “huge” demand for his firm's products ahead of halving.
“Critics can disparage Bitcoin as much as they like, but it’s by far the best performing asset of the past decade,” he said. “We’re bullish about its future.”