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A BTC granted as a reward by the network to miners. Every 210,000 blocks, the network goes through a “halving” — an event in which the rewards for mining are cut in half.block reward is the new
Until now, there have been two such events — in November 2012, when the rewards were cut from 50 to 25 BTC per block, and in June 2016, when the rewards per block were cut again from 25 to 12.5 BTC. The third halving is expected to occur in May 2020.
The Bitcoin price often consolidates right before the halving date, before the rate of increase greatly accelerates afterward. We have previously discussed the price action before and after halving here. In May 2020, the price may be between $8000-$9200.
Crypto trader @cryptoengineer visually outlined the BTC phases before halving along with the dates of the Bitcoin halving.
🔥Are you ready for #Bitcoin Journey?🔥
BTC bottomed around 200 days before it's halving date in 2012 & 2016
— Crypto Engineering ⚡ (@cryptoengineers) October 20, 2019
According to the chart, we are seemingly in the re-accumulation phase — which is likely to continue until May 14, 2020, the projected date of the halving.
The tweet above asks the question: “What will the price be at the date of halving?” Let’s analyze and try to answer that question.
In order to limit the scope of possible Bitcoin price movements, we have drawn curved trend-lines into the logarithmic Bitcoin price chart — along with outlining the re-accumulation phase.
One interesting thing is that the price has always touched the support line after it has made a bottom and prior to halving. On the contrary, in the current movement, once the price made a bottom in December 2014, it initiated the expansions phase and has not touched the support line since.
At the date of halving, the support line is projected to be around $8000. Therefore, this should act as a lower limit of the Bitcoin price in May 2020.
During the two previous re-accumulation phases, the Bitcoin price had an average rate of increase of 0.42 percent per day.
Currently, the price is trading inside a descending wedge. We have stated previously that we believe the BTC price will eventually break out. Since the price is likely to touch the support line before halving, the breakout should end in one of the resistance areas outlined above before heading towards the support line.
Based on the time Bitcoin has traded inside the wedge, it should reach the support line again in March 2020. Afterward, using the 0.42 percent rate of increase, we get an upper limit of $9200 for the price at the date of the halving. Therefore, in May 2020, the price could be between $8000-$9200.
What do you think the Bitcoin price will be in May 2020? Let us know in the comments below.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images are courtesy of Shutterstock, TradingView.
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