- Historical data indicates that Bitcoin tends to hold a strong offer six months before half of its reward.
- With the expected halving in May 2020, BTC could exceed the recent high of $ 10,350 in November and could defy the 2011 high of $ 13,880 over the next two months.
- In the shorter term, a distribution of the contracting triangle on the hourly chart suggests a potential fall to $ 8,820 in the next 24 hours. The bearish case would be invalidated if prices exceeded the hourly resistance of $ 9,245.
- A rapid move above $ 9,245 and an increase to $ 9,606 on average over 100 days should not be ruled out, as the recent $ 10,350 downturn lacks volume support.
Bitcoin should look good in November with a positive price event expected in six months.
Cryptocurrency number one by market value leaves positively October, after sharply recovering from its five-month low of $ 7,500 a week ago.
The rally could be extended next month, with cryptocurrency being halved in May 2020. The process aims to reduce inflation by cutting the bitcoin reward by 50% every four years. by block extracted in the blockchain.
Currently, miners receive 12.5 BTC for each block extracted. This will fall to 6.25 BTC after halving, which means 50% fewer bitcoins will be generated every 10 minutes. In other words, the supply of new parts will decrease by half after May.
In the past, cryptocurrency had got a strong offer six months before half the reward.
The overall Bitcoin premium was reduced from 50 BTCs to 25 BTCs in November 2012. BTC increased from $ 5 to $ 16 in the three months to mid-August and built a new base around $ 10.00 in November.
In the same spirit, BTC went from $ 360 to $ 780 in the four months preceding mid-June 2016, before reducing earnings and falling back to $ 465 in August, when the lump sum premium passed from 25 to 12.5 BTC.
The data indicates that the market is starting to take into account an impending reduction in supply six months in advance.
Thus, if history is a guide, the BTC could far exceed the recent high of $ 10,350 in November and could challenge the 2019 high of $ 13,880 over the next two months.
In addition to the likelihood of a recovery, Bitcoin has posted gains in November over six of the last eight years.
Notably, the month of November has been a green month for six consecutive years from 2012 to 2017. The winning series has ended last year with a fall of 37% – the biggest November loss ever recorded . At the time, however, BTC was in a bear market. Cryptocurrency had already fallen 70% from the record high of 20,000 USD in December 2017.
This time, the general trend is on the rise, as evidenced by the gains since the beginning of the year in three figures. The BTC should therefore restart the winning trend of November.
Currently, Bitcoin is changing hands around $ 9,100 on Bitstamp, a drop of 0.2% in 24 hours. Cryptocurrency is trapped between main moving averages (MA), as shown in the graph below.
Daily and hourly tables
Bitcoin has been under pressure over the past 24 hours, as expected, but the drawback is limited around the 200-day MA, currently at $ 9,025.
The distribution of the contracting triangle on the hourly chart indicates that the bitcoin could still fall back to the old $ 8,820 bracket converted into support. A violation of this right would expose the next support to $ 8,474.
The outlook, as shown in the hourly chart, would become bullish above the lowest peak, at $ 9,245. A quick move above $ 9,245 can not be ruled out as the recent $ 10,350 drop is accompanied by a drop in trading volumes. A low volume correction is often short-lived.
A breakout above $ 9,245 would likely give a new 100 day AM test at $ 9,606. Note that BTC has failed three times in the last five days to maintain above-average earnings over the long term. As a result, a UTC fence greater than 100 days MA could embolden the bulls, resulting in a sustained movement of over $ 10,000.
Disclosure: The author does not hold any cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View