Bitcoin Price Will Not Necessarily Drop After Halving
Will Bitcoin Price Drop After Halving? Not Necessarily
The Bitcoin (BTC) block reward halving is expected on May 12 and traders’ opinions on the direction of the price after the event divide. Some expect that Bitcoin price will see a “sell the news” type drop after the halving while others anticipate bullish trends.
If Bitcoin, the top listed asset on CoinMarketCap, surges in price after the halving and breaks out of its 315-day cycle wherein it tried to establish an extended rally for five times in a row, a significant upsurge could take place.
Will bullish momentum continue after the halving?
The forthcoming Bitcoin halving is the only mechanism in existence which affects the production and supply of BTC. Considering the fact that Bitcoin is a deflationary currency due to its immutable monetary policy, anything that affects its supply will finally impact its price.
Traders have come to expect a sell-off after the halving because it is an event that is set in stone. A halving occurs once every four years and previous halvings took place in 2012 and 2016.
After previous halvings the price dipped afterward, recovering over the following months and eventually reaching new highs 10 to 11 months later.
The highly expected nature of the halving increases the probability of a market dump as the consequence of its initiation. But, if that does not happen, Bitcoin can possibly aim at the macro range high at $11,500 and $12,400.
A chart presented by a crypto trader known as “Galaxy” indicates the possible price trend if it does not correct after the halving.
“The fact that BTC is going to $13K simply cannot be ignored,” said the trader while analyzing the scenarion of Bitcoin if it breaks out of the $9,500 to $9,900 resistance level.
Such a scenario playing out for Bitcoin in the short-term would lead to BTC entering a completely new price cycle and ensuring a fresh start to a new multi-year range.
Most technical indicators hint at a pullback
The probability of an extended Bitcoin rally immediately after the halving without any correction is still low.
Another crypto trader called “Byzantine General” said that almost every major technical indicator hints at an upcoming pullback for Bitcoin after a 150% price surge since March.
“Sell signals. Sell signals everywhere. Currently flat, waiting for a good setup,” the trader stated.
Other sell signal which may threaten the recovery of Bitcoin are the Relative Strength Index overhead resistance dating back to 2017 and record-high sales which occurred in the over-the-counter market when BTC was at $9,400. Both support the argument for a post-halving dip.
Earlier CryptoTheNews shared a report which indicated that TD9 sell signal also points to the possible trend correction.
While selling pressure in the cryptocurrency market outweighs buying demand, there is still a possibility that a post-halving upsurge takes place. Historically, Bitcoin has shown that it can remain bullish despite bright sell signals.