By
Chimamanda U. Martha
April 24th, 2024
Bitcoin halving is expected to happen in 7 days and analysts have very different opinions on possible BTC price movements after the event. It said that the price may drop.
Even though we were witnessing Bitcoin rally in the last few days, it seems that we came to the history repeating – meaning the pullback. We have 7 days until the BTC halving happens and temporary price pullback usually follows the supply-altering event.
Still, we should be aware of the fact that from its bottom that happened on March 13, when it was $3,867, Bitcoin rocketed more than 130% to the price of $8,767 at 9:35 am ET. Only in the last week of April, the cryptocurrency rose from $6,700 to $9,400. This is usually attributable to the Bitcoin halving.
When the first halving happened in 2012, BTC jumped 34% from $9.5 to $12.75 in only four weeks. The cryptocurrency went through its second halving on July 9, 2016. On that day, it was trading near $660, representing over 45% gain on the low of $440 observed in mid-May (and it peaked at $780 in mid-June).
Bitcoin Bull Run Is Expected
Some investors expect Bitcoin to follow a similar path after the May 2020 supply cut.
Don Guo, CEO of Broctagon Fintech Group explains:
“Halving will reduce the amount of bitcoin’s rewarded to miners, thereby reducing the supply of coins entering the market. Not only does halving boost the price as a result of the added scarcity, but the additional media attention and the positive impact this has had on bitcoin prices historically will drive up demand.”
However, we should remind you that the previous bull runs did not start right after halvings. Actually, the 2016 halving was followed by a price drop to $465 on Aug. 2. That represented a loss of around 30% from the halving day price of $660.
This Time Is Different: BTC Price May Fall Days after Halving
However, the May 2020 halving is different from the previous two events, as it is happening amid the peak of the coronavirus outbreak.
The coronavirus pandemic has pretty much disturbed the world’s economy and forced governments and central banks across the globe to add trillions of dollars of stimulus to the financial system.
So, because they are afraid of potential inflation, people currently have a strong reason to search for alternatives like Bitcoin, which is getting more limited with every halving.
Simon Peters, a crypto asset expert at global investment platform eToro noted:
“Amid the deteriorating economic outlook for the U.S. economy and the likelihood of an ever-increasing monetary supply, which weakens the dollar and stokes inflation fears, we believe it could easily test previous highs above $19,000 as investors look for safe havens away from traditional assets.”
However, most analysts still believe the cryptocurrency could test five figures ahead of the halving.