Bitcoin has witnessed its first rally of 2019 and it was good while it lasted, as the prices have started correcting themselves and the current price of Bitcoin at the time of writing was at $3,618 with a market cap of $64 billion.
The 24-hour volume of Bitcoin at the time of writing was at $7.65 billion and most of the trade volume comes from trading derivative contracts from BitMEX exchange via trade pair BTC/USD. BitMEX contributes a whopping $1.7 billion in trade volume.
The one-hour chart shows no signs of a downtrend, but an uptrend that extends from $3,619 to $3,663. The resistance points at $3,498 and $3,577 have been successfully breached and are currently holding below it. The support at $3,358 was respected as the prices bounced off of it.
The Parabolic SAR markers indicate a bearish trend as the markers have formed above the price candles.
The MACD indicator shows a bearish crossover that’s looming over the prices. The MACD histogram shows the same trend as red bars have formed below the zero-line.
The Relative Strength Index shows an overbought level for BTC in the one-hour chart, indicating the upcoming bear trend.
While there is no clear formation of an uptrend, the one-day chart shows a downtrend that extends from $9,800 to $3,613. The support at $3,189 has supported fantastically so far, however, the support at $4,111 is being continuously being tested. The resistance point at $7,641 is holding steady.
The MACD indicator shows a bearish crossover as of February 07, 2019. The MACD histogram is starting to light up with green bars above the zero-line, indicating a bullish presence in the market for Bitcoin in the one-day time frame.
The Stochastic indicator is showing the same as well, due to the bullish crossover that has taken place.
The Chaikin Money Flow indicates an influx of money into the BTC markets as the CMF line has risen above the zero-line after briefly dipping its toes below it.
The one-hour chart shows a bearish trend for Bitcoin unlike in the one-day time frame. The indicators, SAR, MACD, and RSI all show a bearish trend. The one-day chart shows bullish signs for BTC as confirmed by the Stochastic, CMF and MACD indicator.
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Bitcoin [BTC] Halving: CoinMetrics pegs top-crypto to rise above $20,000 peak in late-2021
With a year left for the highly anticipated Bitcoin [BTC] halving, many expect the price of the top-cryptocurrency to surge prior to May 2020. Analysts have previously opined that three months to one year before the halving does the price of the cryptocurrency move up.
A new piece of research from the cryptocurrency analytics firm, CoinMetrics, suggested that in addition to the precursor pump, Bitcoin [BTC] will reach its “local peak” 18 months after the halving.
CoinMetrics charts the price of the top coin, divided based on the 2012 and 2016 halving, showing a noticeable trend. A little more than a year after the first halving when the 210,001 block was mined, the price of Bitcoin surged above $1,000 for the first time, in December 2013 to be precise.
Next, During the July 2016 halving, the coin was trading at just above $600 and within the suggested period of 18 months, the top virtual currency saw its second peak. On 17 December, the coin reached a never-before-seen high of over $19,700 as the Chicago Futures exchanges embraced the digital assets market.
With the price of Bitcoin over $5,000 for the first time in over four months, and the precursor halving bulls on the horizon, the price could surge. Furthermore, based on CoinMetrics’ inference, Bitcoin will see its third peak, higher than $20,000, by the close of 2021, eighteen months after the May 2020 halving.
The halving protocol was placed in the original whitepaper to thwart inflationary pressure that would arise with more blocks mined and more Bitcoins supplied. Historical charts prove that this objective has been adhered to, with a constant drop in the inflation rate with the two previous halvings.
In 2012, the inflation was over 25 percent and immediately after the miner reward reduction to 25 BTC per block, it dropped to under 15 percent. A bracket between 7 percent and just under 20 percent sustained until the second halving in July 2016.
The second halving saw a decline in inflation rate to under 5 percent for the first time in the coin’s history, which has been maintained till today. CoinMetrics pegs the inflation, at press time, to be 3.8 percent. Furthermore, if the historic trend continues, the inflation rate would drop by more than 50 percent to 1.8 percent in May 2020.
Based on the current market and using a historical outlook, analysts suggested that 2019 will be the year of building the industry while the price effect will manifest next year, with the halving being at the very core. Many believe that institutional interest on the rise and the growing crypto-adoption surge could result in a bullish 2020.
Charlie Lee, BTCC’s co-founder suggested in December 2018 that Bitcoin’s next rally will begin in “late 2020”, months after the halving and would peak in December 2021 at 333,000. However, the precursor to this rise would be a January 2019 bottom of $2,500 which did not materialize.
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