Bitcoin will reach $ 14,000 by May when history repeats itself now
Bitcoin will reach $ 14,000 by May when history repeats itself now
Bitcoin’s halving in May 2020 is fast approaching. Historically, the cryptocurrency hit new local highs before the event and new all-time highs shortly thereafter. Now of course everyone is wondering if this will happen again this time.
Background: After the event, the supply of new Bitcoin, which is issued to the miners every ten minutes, is halved. 12.5 BTC then becomes 6.25. The event takes place every 210,000 blocks or about every four years. It continues until the network has issued a total of 21,000,000 Bitcoin. So far there have been two halves – one in 2012 and one in 2016.
Given the price action associated with halving so far, many in the bitcoin industry expect the event to be a catalyst for new all-time highs again. Unfortunately, with just two events to date, there is not much historical evidence. However, what is there supports this argument.
As Bitcoin market analyst Rekt Capital (@rektcapital) emphasizes, the year of halving typically sees a new market cycle high that does not exceed the previous all-time high set in the months before the event itself. Should that repeat itself, the new high before halving will be somewhere above $ 13,900 but below $ 20,000.
In the year of the Halving but still before the Halving, #Bitcoin has always reached a new high relative to the high of the previous year
Halving 1:
2012 – $7.40
2013 – $15.40Halving 2
2015 – $504
2016 – $794Halving 3
2019 – $13.900
2020 – ?https://t.co/4StGraQAaQ$BTC— Rekt Capital (@rektcapital) January 8, 2020
Rekt Capital analyzes the price campaign relating to the events of 2012 and 2016 in a medium post and describes the halving as:
“… an event that guarantees legitimate shortages.”
Although many analysts have discussed the previous price action in connection with this halving, the thesis “supply goes down, price increases” does not convince everyone. The debate over how the halving affects prices is primarily about whether the market has already priced in the halving or not.
Coinmetrics.io founder Nic Carter believes that the Bitcoin market is efficient enough to include such a well-known event as the price cut in half. He therefore assumes that the halving is already included in the Bitcoin price.
However, that doesn’t mean that Carter is bearish for Bitcoin’s future. Rather, he realizes that if the bitcoin market is as efficient as he thinks, a sudden change in supply without increasing demand won’t result in higher prices.
His generally bullish outlook for the future stems from the fact that he sees many more potential catalysts around the world that are meant to encourage people to buy Bitcoin.
