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Two key factors affecting Bitcoin’s price: Halving and Coronavirus

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For the past couple of weeks, volatility has been the main feature of the crypto market. And it is that, if cryptocurrencies such as BTC already have the reputation of being volatile, in recent days we have seen constant increases and decreases in their prices. Being necessary to understand these movements, the two key factors that affect the price of Bitcoin: Halving and the Coronavirus.

First key factor: The proximity of the Halving

For all members of the crypto community, the proximity of Halving on the Bitcoin Blockchain is a key event to understand what is happening in the cryptocurrency market. Well, it conditions the attitude of traders towards BTC.

Halving is an event that occurs approximately every four years. In which the amount of Bitcoins that are emitted by each block mined in the Blockchain is reduced. With this, the amount of BTC that is issued every day also decreases and, therefore, the rate of increase in monetary liquidity in this market contracts.

Bitcoin halving is one of the most important events of the Blockchain
Bitcoin Halving is one of the most important events of the Blockchain

This is equivalent to saying that the supply of Bitcoin is reduced, while its demand remains unchanged. For this reason, most market analysts expect that once Halving is done, a significant increase in the price of Bitcoin will occur.

This as it happened shortly after the last Halving in the BTC chain in 2016. Which is considered the main cause of the great bullish rally of 2017.

With this in mind, Bitcoin traders would try to guide their buying and selling strategies, under the assumption of an increase in the price of Bitcoin. What is currently recognized as the main cause in the bullish rally that the crypto market experienced during January and February. However, this trend faces another force majeure that pulls prices down.

Due to the aforementioned, Halving is considered one of the factors that affect the price of Bitcoin.

Second key factor affecting the price of Bitcoin: The Coronavirus

For much of 2020 so far, crypto market analysts considered the Coronavirus to be one of the key factors in Bitcoin’s price surge.

His reasoning was that, being the cryptocurrency an asset value reserve, a phenomenon like this, which threatened to generate a major disruption in the markets, would have to be positive for the cryptocurrency’s listing.

However, those theories ended up discarded when the first day of collapse in global financial markets, Bitcoin also collapsed alongside gold. Thus contradicting most analysts who indicated that a fall in the stock markets would bring a certain increase for Bitcoin.

At the end of the day, the pandemic that has affected many of the countries, has been an anchor for the price of Bitcoin. Generating setbacks of up to 50% in a single day in your price. And calling into question the ability of the cryptocurrency to reach prices above $ 10,000 once again.

Bitcoin's price has been marked by volatility in recent weeks thanks to two key factors: Halving and Coronavirus. Source: Coindesk
Bitcoin price has been marked by volatility in recent weeks. Source: CoinDesk.

Thus, the volatility in the price of Bitcoin has been marked by two key factors throughout these months.

On the one hand, an uptrend driven by the proximity of Halving on the BTC Blockchain. And on the other, a downward trend that revolves around the Coronavirus and the distrust effect it is causing in investors in all markets.

When Halving is only a few days away and Coronavirus accelerates its harmful forces in the countries it attacks. The price of Bitcoin will live a battle inside of these two opposing forces, which could generate even more volatility than it has generated so far.



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