Bitcoin Price Drops Over 10% to $8,700 BTC/USD Just 50 Hours Before Halving
Just Days Before Bitcoin Halving, What’s Happening To The Market?
The estimated time for the bitcoin block half reward halving is near 2 days from right now.
Bitcoin will turn 4,141 days old when it is set to take place on May 12, 2020. Since Satoshi released the network's code into the wild on January 9, 2009, to the second halving on July 9, 2016 (1,403 days ago), Bitcoin is coming up on its third of 33 more halving splits set to unfold over the course of its mining rewards system.
Bitcoin is set to halve on May 12 (late Monday night May 11th in US), and there are several events going on in the market. Top of them is that the majority of the traders are expecting the value of the king coin to decrease. But, as bitcoin usually holds true to, fireworks ensue after the leading cryptoasset coin rallied over 130% in the past month by reaching just over $10,000 on May 7th only to drop 11% and counting down to $8,700 range today.
The crypto market managed to fall from $260 billion range down to as well as $238 billion, a $22 billion market cap value wiped in mere minutes.
As the third of thirty three more halvings of the bitcoin blockchain reward system for the miners who contribute computing hash-power to securing the network in exchange for freshly minted coins being issued every ten minutes begins to unfold, as expected, volatility for the price of bitcoin has begun to start with fireworks.
Crypto Exchanges Becomes The Main Bitcoin Sellers
As per a top on-chain analyst, crypto exchanges may be piling pressure to sell as the dump has begun on May 9th, just under 50 hours left before the BTC halving event.
Hypersheet co-founder, Willy Woo, explains that most of the crypto exchanges are likely to start disposing of their crypto storage earned from trading fees. Notably, crypto exchanges earn crypto as trading fees which they later sell in order to cater for their operational costs.
Given that the exchanges earn about 1,200 Bitcoins every day as trading fees that is currently equal to $11.6 million, this may lead to a slow down to a Bitcoin surge.
In addition, miners’ revenue is set to decrease from 1,800 to 900 BTC every day after the halving, Woo states.
In this regard, after the halving, the risk of a main sell-off will come from exchanges as opposed to miners. He explained:
“Post this 2020 halvening miners will cease to be the biggest sellers of Bitcoin. It'll be the dawn of the crypto exchange as the leading seller.”
Coinbase is down.
— Pomp 🌪 (@APompliano) May 10, 2020
Perpetual Funding On An Upward Trend
During the Black Thursday period the perpetual rate funding has been on the negative side but after the mid-march market crash, the perpetual funding rate has slowly gone back to positive. The perpetual funding rate has crept towards the positive side in the first week of May majorly due to the oncoming Bitcoin halving.
According to a hedge fund manager working with Blockchain Opportunity Fund explains that the current put-call ratio is increasing from mid-March and is approaching a three-month high. The analyst argues that the surging put-call ratio is a sign that Bitcoin is on a bullish trend due to the impending Bitcoin halving.
In the meantime, the majority of crypto worshippers are selling their altcoins to buy Bitcoin due to fear of missing out (FOMO) as the halving is imminent.
While the bitcoin price has dropped over $1,000 in value with the BTC/USD exchange rate since cracking $10,000 benchmark for the first time since mid-February, many wonder what is next for the crypto market?
Is it the end of Crypto again?
— Ran NeuNer (@cryptomanran) May 10, 2020
Or is it just business as usual?
$100 million worth of longs just liquidated as bitcoin dumps below $9k
— Joseph Young (@iamjosephyoung) May 10, 2020
As always, one trader, investor, or avid follower should always do one thing when watching the price of bitcoin – buckle up the seat belts:
Tick tock it's officially Sunday UTC, time to let the $BTC games begin
$9100 couldn't hold – that was a key area
Bitcoin looks like it hit local top and to be heading down to $7k land if this closes below $8400 (grey box)
Expect more volatility today – seat belts pic.twitter.com/t5DVJB149x
— Josh Rager 📈 (@Josh_Rager) May 10, 2020