May 31, 2024

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Analysis: Bitcoin price barely moves after halving, will this still be the case?  -Blox

Analysis: Bitcoin price barely moves after halving, will this still be the case? -Blox

The price of Bitcoin halved last night. This means that the amount of Bitcoin entering circulation was halved last night. This has a positive impact on the price in the long run, but as expected, the price did nothing in time. Let's look at the charts.

Bitcoin halving

Let's first briefly delve into the halving process and what it means for Bitcoin. The concept of “half” is fairly straightforward. The amount of Bitcoin in circulation will be “halved”. This means that miners will no longer receive 6.25 BTC, but 3.125 BTC for each block mined.

Source: Coinwarz.com

This makes Bitcoin mining less attractive, because miners simply get paid less for it. But in the long term, this is a very positive thing for BTC. The coin has become very popular due to its extreme rarity. There are only 21 million units of these in circulation.

The fewer coins in circulation, the rarer the coin becomes. This means that the price often moves based on demand. The width is getting smaller and smaller. To put this into perspective: A total of 21 million Bitcoins will be in circulation, of which 19.6 million have already been mined.

This number of bitcoins being mined is also dwindling – currently 3,125 bitcoins per block – until the last bitcoin is eventually mined in 2140. So the supply is so small that demand has a huge impact on the price of bitcoin. So the halving is definitely a positive thing, but not in the short term.

What did the price do?

Bitcoin barely did anything when the halving happened. We actually expected this, because it had no effect last time. The long-term effect is basically this – with the above explanation as the cause.

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Fortunately, the price has returned to the red zone in recent days. This point remains very important since the coin fell out of the ascending triangle pattern. The coin has retested bearish, but the red zone is still strong enough that it does not fall below $60,000.

As long as the coin stays here or above, you don't have to worry too much. The price outlook remains very positive in this case. Then the currency continues to make higher lows (long term), indicating an uptrend. It only becomes dangerous when BTC clearly falls below the red zone. Therefore, these levels must be monitored closely.