Bitcoin Price Outlook in May 2020: Time for More Bulls or Bears?
In the month of April, bitcoin price printed a strong and bullish monthly candle. Now that the price is above the level seen before the market crashed in March, bulls are given hope of a bullish trend reversal.
As we reported, this rally was spot driven, and that's why BitMEX funding rates were depressed.
But the futures market is also looking more bullish with positive premiums. The annualized premium on CME for the June contract is now above the average levels for 2020, indicating positive sentiment once again.
Also, a large spread is currently seen between the realized and implied volatility for bitcoin options.
Interestingly, just this week, “A large Bitcoin whale just graduated to a 5yr HODLer. Last week 68k BTC moved out of the 5yr active supply band, indicating that the last time they moved on-chain was in April 2015,” reported Coin Metrics.
However, there is still some bearishness left in the market.
“What does give me pause about short term bullishness though is the wider downward facing channel that's formed in bitcoin over the last year. A channel that must be broached at this time and must be breached in order to make any real bullish calls,” wrote analyst Mati Greenspan in his daily newsletter.
Moreover, as long as the $7,800-$8,200 area is held by Bitcoin, we can very well remain bullish, according to trader Credible Crypto.
— Credible Crypto (@CredibleCrypto) May 2, 2020
These bull calls could turn out to be bears
The market is extremely bullish no doubt with BitMEX CEO Arthur Hayes and CNBC’s Brian Kelly calling for a run-up.
— Arthur Hayes (@CryptoHayes) May 2, 2020
With less than 10 days to the halving, “while the whole world is quantitative easing, bitcoin is about to quantitative hardening,” said Kelly.
This daily bitcoin supply is to be cut in half, “in the past, this has been a catalyst for very very big run ups.” As such, we have a “tremendous run up coming into,” halving, he added.
Although Bitcoin has a wood to chop around $9,000, Kelly thinks “in the medium to long term, you now have an asset that is going to be more scarce than gold based on stock-to-flow ratio in an environment where the entire world is printing money.”
Based on past performance, when we had quite a run up, Kelly is seeing in the next 30 to 60 days, a nice run up again.
But CNBC has more often than not worked as a clear indicator of a short reversal and the end of a rally in the past.
Sell everything now and walk away.
Come back in 2 months https://t.co/F30WHHiVgn
— Squeeze (@cryptoSqueeze) May 2, 2020
With halving around the corner and miner profitability to be cut in half, the price has to climb higher or miners, especially over-leveraged ones will get rekt.
But even though the month of May will have fireworks regardless of what the BTC to USD exchange rate value is, the halving will be the 3rd of 33 planned halving events in bitcoin's 130-year run. From 2009 when Satoshi Nakamoto first released the Bitcoin whitepaper, to when the blockchain for BTC will stop minting new coins in the year 2140, there is without a shadow of a doubt that the market's momentum, global financial environment and investor-trader-hodler-spectator ecosystem is stronger now than it ever has been in the past 11 plus years.
While the price of Bitcoin in May 2020 may not see over $10,000, the day-one phenomenon built-into the Bitcoin DNA will be cutting its daily supply of newly issued coins into the world at the same time unlimited quantitative easing is happening and trillions of dollars are being printed to prop up the economy during an unprecedented lockdown. Just remember:
Bitcoin is the only liquid asset with inexpensive 24/7 final “physical” settlement.
— Pierre Rochard (@pierre_rochard) May 2, 2020
The idea of blockchain as a cadaster for tokenizing time as money is in the cards for bitcoin and stars for blockchain. If money is tokenized time via distributed ledger technologies, and time is the source for all measurement – if money is the normal measuring stick, it has to be based on time and blockchain enables virtual programmable money to happen for the first time in history and Bitcoin is the leader for helping globalize the world in terms of being the backbone for all economical activity and commerce.
Whether or not the bitcoin price “moons” right before, during or after the May 2020 halving, or even corrects to half the price it is today; those in the know and on the go who can look at around the corner at the future of finance from a high up enough macro level where all of the driving forces that contribute to how things have been in terms of money as it stands today, and one might start to realize just how fundamentally sound, important and innovative it will be for society no matter what the real-time live exchange rate is.
However, as it stands today, bitcoin is a largely speculative “gambling” asset for most investors and traders, so the price of the BTC cryptocurrency is what gives the leading digital asset its ‘value' in the market – but the underlying current of how revolutionary blockchain will become and why its first application was always meant to be the best because it engulfs and encompasses so many other ‘value-claimed-asset-trading' mechanisms, that anyone who wants to roll the dice with Bitcoin should strongly consider its' overall outlook and optimism within a majorly-decentralized community that has one common goal.
While the crypto world is awaits bitcoin's halving event and wonders what the price of BTC/USD exchange rate will do, just remember the marathon Bitcoin is on and the halving is just another checkpoint to sprint past and see where the real finish line is for the earth's best, honest and most transparent financial innovation since accounting was invented.