Bitcoin is attempting to trigger a new bullish wave. After setting a benchmark last week by rallying to gain more than $1,000 in less than 24 hours, the crypto community expects bigger things this week. The current bullish momentum is being pushed by the Bitcoin halving expected next week.
The next halving is going to be only the third halving Bitcoin goes through in its history. A look at the last two, in 2012 and 2016, they were followed by massive rallies. Gaining more than 1,000% in weeks. So the big question has been, can we expect history to repeat?
If it does, Bitcoin is set for an all-time high. Its current ATH is $20K achieved in 2017. Notably, Bitcoin jumped from $9K to its ATH of $20K in 21 days. This means that while some might fear its already late, its clear that Bitcoin can go straight up gaining double-digit gains day by day.
But there is reason to be wary of Bitcoin. Current trends, price sensitivity, and an overall view of the global financial system suggest that the coming halving will be a critical one and one that could swing sporadically.
Why This Bitcoin Halving Is Different
The first is price sensitivity. As seen right now, there is a lot of hesitation from bulls to go full-blown. This is because there is fear that current buyers are speculators who could easily dump to take profits after the asset has topped post halving.
Many investors think they will be caught out in a bull trap and with the halving hype, they could suffer a huge loss.
If Bitcoin hesitates during halving, this will trigger a great dump. https://t.co/HflJLaTFbr
— Crypto.Jei (@CryptoJei) May 5, 2020
The other reason is that there are fewer buyers. The current COVID-19 pandemic has shaken the world. With a recession in sight, many potential buyers are unable to buy. And even those who can, they are limited as there is a huge need for dollar liquidity as long as the pandemic lasts.
The coming Bitcoin halving is key. It could force the coin into a long term bull trend of a long term bear trend. Hopefully, it will at least push Bitcoin to reach its 2019 high of $14K.