Very soon, April 19 to be exact, the long-awaited Bitcoin halving will take place. After that, miner rewards will increase from 6.25 BTC to 3.125 BTC per block found.
So how will this shake Bitcoin?
Many “experts” claim that after the halving, coin “creation” will slow down and new supply to the market will decrease. If the demand for BTC remains stable, its price will skyrocket.
This is all true, but for interest in digital assets to increase, good market vibrations need to develop. And let’s face it, the vibes aren’t all sunshine and rainbows right now.
There are several reasons for this:
- The stock market is in turmoil, and in such a climate, big players are not really rushing to invest their money in risky assets like Bitcoin.
- Geopolitical tensions are still simmering, especially with everything going on in the Middle East. Additionally, US inflation data does not suggest any decline in short-term rates.
But it’s not just growing ties to the traditional financial system that are holding back demand for Bitcoin. There are also some technological issues.
For example, miners could start withdrawing from the BTC network due to rising mining costs, which could slow down transaction processing and overall network speed.
How has it been in the past?
After the second half, it took three months for the asset’s price to increase by just 2.6%, and by the fifth month things started to get serious.
As for the third halving, the price of Bitcoin rose 21% in the first three months. Not bad, but as we’ve seen, it doesn’t skyrocket overnight.
We now need to clarify why things would be different. The yet-to-be-determined incidents also didn’t take off immediately after its recent halving: it still has to catch up in the market.
At the end of the line ?
Are you talking about a surefire Bitcoin boom due to the halving? It’s taking the plunge. There are a lot of things that need to align for this scenario to come true.
As we have seen, things still need to fall into place. Do you buy bitcoins with all your funds before halving them? This is playing with fire, my friend.
But if you have the courage, don’t lose sight of the support and resistance levels and, above all, don’t forget to stop orders. Risk management is essential in times like this.
Overall, let’s hope that with the influx of smart money and the growing technical knowledge of crypto investors, the trading game will have changed and the market will be a little less chaotic.
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