(Rejected) bitcoin’s Post-Halving Price Movements Show Long-Term Promise and Multi-fold Price Increase
The upcoming Bitcoin halving, third in the digital asset’s history, is a monument of sorts for those in the cryptocurrency industry. While reduced block rewards mean a changing dynamic for miners, traders may have a lot to gain if past data is considered.
Halving as a Trading Indicator?
Every four years, the Bitcoin protocol automatically halves block rewards for miners. The adjustment controls inflation and ensures a steady supply of BTC, which prevents entities from gaining a monopoly in terms of the latter.
But the constrain has created an opportunity for enterprising traders, if price data from the last two halvings are considered.
Bitcoin rose 318 percent and 142 percent pre-halving in 2012 and 2016, followed by post-halving gains of a mammoth 6612 percent and 272 percent over a 12-month period respectively.
Volt Capital founder Soona tabulated the above via a tweet:
https://twitter.com/soonaorlater/status/1157110548598861824?s=21
On-chain analytics firm Glassnode confirmed a bullish bias in the cryptocurrency market in a report last week. The firm pointed out long-term bitcoin investors significantly increased holdings last month, particularly when the digital currency was hit by a near-50 percent drop on March 12.
Bitcoin Pegged at $50,000 by Analytics Firm
As investors globally seek respite from the fall in traditional markets, Bitcoin’s price rises may attract several institutional investors looking to ride the trend and gain exposure to crypto-assets.
Recently, a crypto analyst using the moniker “PlanB” published a now-famous valuation analysis of Bitcoin. Using a Stock-to-Flow model, they expect the digital currency to reach at least $50,000 post-halving at the minimum, with $100,000 another expected outlier.
However, the surging prices could be a result of a self-fulfilling prophecy. The latter is a philosophical construct that attributes an outcome to the behavior of an individual/s that causes said outcome, instead of other external factors.
Whales Big on the Crypto Market
Meanwhile, Glassdoor noted “whales,” or individuals holding upwards of 1,000 BTC in a single wallet has hit a “two-year-high.” The firm further pointed out:
“[This is] exhibiting an accumulation pattern similar to one that we had seen in the lead up to Bitcoin's previous halving.”
CoinMetrics, another on-chain analytics firm, also revealed a whale holding over 68,000 bitcoin - about $563 million at current prices - has not moved their holdings since April 2015. The sentiment indicates large holders favoring bitcoin over alternative investments, presumably due to the former’s finite supply, anti-inflation mechanism, and future prospective.