BTC/USD bulls retained control for the second day in a row as the price moved in an upside price channel. Just 5 days before Bitcoin halving, the bulls took the key resistance $ 9,140- $ 9,200. Now they are heading for their new $ 9,500 target.
Recently, however, the halving of Bitcoin (BTC) has captured the imagination of the crypto industry and predictions are definitely not lacking. These range from a downside spiral in price that will destroy the Bitcoin network to a parabolic appreciation of the main digital coin. How will this event affect the price action?
Here are some possible scenarios for Bitcoin halving and the price:
- From a negative point of view, some analysts believe that traders who have “bought the rumor” will “sell the news.” This scenario is possible, but difficult to assess, as traders do not usually share their strategies. In my opinion, this scenario should not have a strong impact on price.
Also, negative would be the scenario in which miners will put sales pressure, dragging the price down. But this case is again unlikely. Because Bitcoin halving means that miners will receive half the Bitcoins for the same work. And this doubles the unforgettable cost of creating the first cryptocurrency.
Miners’ costs are effectively fixed. So, to maintain the same profit margins, they should be encouraged to double the price at which they sell their Bitcoins. I expect that this supply shock will raise the price significantly.
- And from here we move on to the most positive scenario. In this case, the ratio of stocks to new flows after halving will cause upward price pressure. This scenario relies on the logic that the combination of Black Thursday (March 12) and the upcoming halving of the block award will push out weak and inefficient miners. The remaining miners will have lower costs and be forced to sell less of the newly created blocks to cover them. This dynamic, combined with the macroeconomic tailwinds provided by global governments and rising inflows into passive investment products such as Bitcoin (which we are currently seeing), could trigger a perfect price rally in the medium and long term.
Of course, there is an option for the halving to be already priced in and to have no impact on the market. But to figure out which scenario will play out, we don’t have to wait too long. There is less than a week left until the big day.
Technical analysis of BTC/USD
Although the event is fast approaching and retail investors are feeling more and more bullish, I must remind you something. After falling to $ 3750 on March 13, the price of BTC rose by over 145%. So, the current daily chart picture is starting to look overbought.
In addition, looking more closely at the weekly chart, we will notice that $ 9,500 has proven to be a key level of resistance and support. Overcoming this level is expected to be a challenge. But given the proximity of Bitcoin to the price, a strong jump in volume could put it out of the game. In the short term, traders must monitor the volume of trade and for a break above the daily high of $ 9,375.
In addition, the SMA 20 passed over the SMA 200 to chart a bullish cross. MACD shows an increase in upside momentum. But the RSI indicator is already in the overbought area at 79.50. That means that short-term bearish correction may be around the corner.
On the downside, I expect the $ 9,198 and $ 8,535 levels to provide strong support.
Author: Silviya Velcheva
* The views expressed in this material do not constitute a recommendation or advice for the purchase or sale of cryptocurrencies in the digital assets market or other financial instruments. The predicted forecasts meet the expectations of the author of the material and may not materialize. Trading in currencies, contracts for differences on margin or cryptocurrencies poses a high risk and may not be suitable for all investors. Past results are not a guarantee of future success.