The global market sell-off has not only resulted in the Dow Jones Industrial Average tumbling into a bear market at a furious pace on Thursday but also in the bitcoin and crypto market as well.

The world’s leading cryptocurrency today fell to May 2019 levels at nearly $5,700 before keeping above $6,000. The digital asset shed more than 23% earlier in the day, which has been the largest single-day drop since December 22, 2017.

Though commentators are calling out for the crypto investors to keep calm and HODL, the plunging prices with reward halving coming in less than two months now are making people nervous as well.

T-minus 60 dayshttps://t.co/4SAqgLvhZ7

— Jameson Lopp (@lopp) March 11, 2020

Scheduled for May 11, 2020, as per Bitcoinblockhalf.com, the third reward halving is still 59 days away but the macro view is bleak and with the S&P 500’s market movement reflecting that of the Great Depression in 1929, the losses can extend well into next year.

#SP500, 2020 vs 1929 (Great Depression). pic.twitter.com/6bI5J7hJ0N

— Gabor Gurbacs (@gaborgurbacs) March 12, 2020

“Big Miner Stress”

The bitcoin reward halving that occurs every 210,000 blocks will decrease the block reward from 12.5 BTC to 6.25 coins. This reduction in bitcoin supply combined with the possibility of a recession means “big miner stress”. Analyst Charles Edwards said,

“The Bitcoin Halvening event is already a stressful period for miners as their revenue stream effectively halves, causing low profitability miners to go out of business.

Add a recession to the equation and tightening credit lines may put a lot more “zombie” Bitcoin miners out of business in a Credit Crunch type event,”

Estimating that the number of Zombie miners are roughly the same as US-listed companies (18%), the recession event would result in an additional 20% of Bitcoin miners going out of business, said Edwards. Meanwhile, Bitcoin’s production cost would double which is currently $7,900.

As a result, a 20% drop in hash rate and ergo 20% drop in Bitcoin’s fair value that puts it at $6,400, is expected.

Things to get nasty if the price not high enough

This halving would also make bitcoin the second most scarce asset after gold as per the stock-to-flow model. Analyst PlanB puts Bitcoin’s value above $10,000 during halving and above $100,000 before December 2021.

However, with the price of the crypto asset falling below $6k has the detractors of this model like an economist and trader Alex Kruger taking yet another jab at the S2F model.

“I'm certain that model and a few other nonsensical bullish models and a lot of influencers have gotten a lot of people absolutely REKT,” said Kruger.

Is that stock to flow model you guys like so much still on track for the halving?

— Alex Krüger (@krugermacro) March 12, 2020

With investors now looking to de-risk, it is hard to imagine that the event would attract new money.

“Miners have been hoarding inventory, borrowing USD against BTC collateral. Many are over-exposed. The halving will slash their profitability. It could get nasty if the price is not high enough,” said Kruger.

So miners get half the amount of Bitcoin and can only sell it for half the price in a few week's time.

Halving sounds like a shit deal for them, not gonna lie.

— DonAlt (@CryptoDonAlt) March 12, 2020

However, it could be expected the halving event will still get a lot of attention, particularly in connection with massive central bank stimulus announcement to combat the effect of coronavirus on the economy.