Bitcoin price fears: May 12 could cause cryptocurrency price to crash
Some have predicted a “sell the news” type drop will hit bitcoin following the May 12 event. The dire prediction comes a week after bitcoin rose to the highest in more than two months. Traders and analysts cited growing demand for bitcoin before its latest halving.
The event will mean a 50 percent cut in the production of the cryptocurrency.
The halving is one of the few observable events known to materially impact price.
A rule written into decentralised digital currency’s underlying code slashes the number of new coins awarded to the miners behind the global supply of bitcoin.
A halving occurs once every four years and previous events were triggered in 2012 and 2016.
Bitcoin is the top listed asset on crypto market data provider CoinMarketCap.
Because it is a deflationary currency due to its unalterable monetary policy, anything that affects bitcoin’s supply is sure to have an impact on its price sooner or later.
Traders expect a sell-off after a halving because the event is sure to happen.
Over recent years bitcoin’s price was slashed after such events and went on to make gains over the months that followed.
And within 10 to 11 months the cryptocurrency has pummelled to new highs.
Bitcoin buckles as drive to $10k is slapped down [INSIGHT]
Bitcoin makes guest appearance on The Simpsons [ANALYSIS]
Nerves creep in to crypto markets as weekend looms [INSIGHT]
While some experts have predicted a fall in price after next week’s halving, others foresee a bullish continuation of its recent performance.
Last Thursday bitcoin’s price exploded to more than two-month highs.
As of 7.03am it had gained as much as 18.57 percent to $9,388 (£7,555).
But as always, the underlying reasons could only be speculated.
The stock market experienced a rally after it emerged a possible treatment for coronavirus could come sooner than later.
The correlation between the stock market and the price of bitcoin during the pandemic was once again made plain obvious.
If a market dump does not happen after the halving bitcoin’s price could reached new highs.
Crypto trader Galaxy published a chart laying out predictions.
They said if it breaks out of the $9,500 to $9,900 resistance area it could surge.
They said: “The fact that BTC is going to $13K simply cannot be ignored.”
Source: Read Full Article