Bitcoin halving risks being a passing event
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| Bitcoin halving risks being a passing event |
Less than three weeks are left until the next halving of bitcoin, and calm reigns in the digital currency market, forcing analysts to predict that the upcoming event may be a passing one.
Bitcoin has climbed to fresh highs this week, but overall the market remains bearish, with technical signals continuing to point to a downtrend on longer-term charts.
Virus effect
Forecasting models, including stock-to-flow ratio and logarithmic plots, are at odds with signals before the previous halving, making it difficult to form expectations about the future dynamics of the main digital currency. After two previous halvings in 2012 and 2016, Bitcoin has shown aggressive growth.
But it is important to consider that this time we are faced with a completely different economic climate in the world against the backdrop of the coronavirus pandemic, which led to a downturn in the industry and plunged financial markets into a state of shock. Crypto assets also did not dodge the blow, and bitcoin did not show itself as a defensive asset, having collapsed by 50% last month.
Messari experts analyzed past market behavior through the prism of the current environment and came to the following conclusions:
Events in the past are not a guarantee that scenarios will repeat in the future.
The situation today is strikingly different from the situation in 2016.
Anyone who counts on the hype around halving risk being disappointed.
In the 18 days leading up to the halving, Bitcoin is still trading below the range it has spent most of last year in. The weekly relative strength index, meanwhile, settled in the neutral zone.
Moreover, during the last halving period, additional activity was created by the hype around ICO and Ethereum, which will send the bitcoin price from three-digit to five-digit in 2016 alone.
Search Engines in Business
Traders and investors in China often act as a market driver. Search engine query trends show that people are interested in information and news related to Bitcoin halving.
According to industry analyst AltcoinDailyio, there has been a sharp increase in requests for this topic on Chinese social media and especially on Twitter over the past 24 hours.
Analytical platform TheTIE also published figures showing an increase in Twitter activity ahead of halving, with 58% of tweets mentioning bitcoin and gold in a positive way, and positive mentions of BTC in the context of halving make up 63% of the total mass.
The activity in search engines and social networks is, of course, a favorable signal, but there is still a fairly high probability that the coronavirus pandemic and its impact on the global economy will deprive Bitcoin of the hype around halving this year.
According to industry analyst AltcoinDailyio, there has been a sharp increase in requests for this topic on Chinese social media and especially on Twitter over the past 24 hours.
Analytical platform TheTIE also published figures showing an increase in Twitter activity ahead of halving, with 58% of tweets mentioning bitcoin and gold in a positive way, and positive mentions of BTC in the context of halving make up 63% of the total mass.
The activity in search engines and social networks is, of course, a favorable signal, but there is still a fairly high probability that the coronavirus pandemic and its impact on the global economy will deprive Bitcoin of the hype around halving this year.