These are strange times in the Bitcoin Crypto-verse. The heavily anticipated Halving Event is just four weeks away, but there is still confusion in the analyst community as to how the world’s favorite cryptocurrency will react in the weeks and months to come. The actual date is tied to the number of Bitcoins actually mined, but mid-May is often cited as the date for this momentous moment when Bitcoin rewards for miners are cut in half.
The general theory is that less potential new coins in circulation on a daily basis will cause a rise in demand pressure, which would naturally increase valuations for BTC hodlers across the globe. The contrary view, however, is that the market has already factored the impact of halving into current prices, thereby destroying the case for any rapid appreciation in the months ahead when sell on the news is pervasive. As a consequence of these two opposing perspectives, analysts have been searching for insights hidden within in the mountains of data on the blockchain ledger and elsewhere.
BTC USD daily chart. Source: TradingView
As per the above chart, Bitcoin currently appears to be making a “slow grind to $10K”, but as we have seen many times in the past, BTC can just as easily fall off a cliff as it can shoot for the stars. As a point in fact, this chart actually presents both views – the one that points north (in Green) and the one that every skeptic screams is reality (in Red), the case for Bitcoin’s “inevitable path to zero”.
What about those hidden clues that point to Bitcoin’s potential future?
Analysts at Cointelegraph have focused on the $7.6 billion that currently is sitting on the sidelines, stored in various stablecoins and just waiting to jump into the fray. Are these funds waiting for the halving event to have its greatest impact on prices or are these investors taking a breather until the COVID-19 pandemic runs its course. Much has been made in the press about a poor earnings season driving the S&P 500 to greater lows and dragging Bitcoin with it. Are investors in stablecoins waiting for bargains to arise?
Bitcoin is presently hovering about $7,130, a formidable level of both resistance and support. One positive insight suggests that a gap of $8,500 on the CMA futures exchange must be filled going forward. Another positive sign is that Renaissance Technologies, a Wall Street fund manager with nearly $166 billion in assets under management, has shown an interest in cash-settled BTC futures on the CME. In a recent regulatory filing, its flagship Magellan Fund sought approval to participate in BTC futures, considered a precursor of institutional activity in a big way.
Once again, we are confronted with Bitcoin sitting atop a precipice. It has been trapped in a long-term descending channel since June of last year, and now it is starring down a make-or-break crossroads. Which way will it go – up or down? There is no body of absolute consensus at the moment, an indication of the ambivalence that exists within the Bitcoin investor world. If equities tank once more, as some believe, then Bitcoin may display its tight correlation of late with the S&P 500, but if miners choose to stoke Bitcoin valuations higher to offset halving, then the race could be on.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.