The Bitcoin halving, also known as the block reward halving, is a significant event in the cryptocurrency world. Let’s break down what it entails and explore its potential impact:
What Is Bitcoin Halving?
Bitcoin halving is related to how new bitcoins are created and recorded.
Transactions are recorded on a universally accessible ledger called the blockchain.
Miners solve cryptographic puzzles to add transactions to blocks and receive rewards in newly created bitcoins.
To control the amount of new coins entering the market, the protocol halves the miners’ reward approximately every four years (every 210,000 blocks).
Recent Halving (2024):
The most recent halving occurred at block height 840,000.
The reward for adding a new block of transactions to the blockchain decreased from 6.25 bitcoins to 3.125.
Bitcoin will continue to halve until the total supply reaches the maximum of 21 million coins (expected around 2140).
Impact on Bitcoin Price:
Halving reduces the supply of new bitcoins, theoretically increasing the price.
Historical data shows that the past three halvings resulted in an average price increase of 16% over 60 days following the event.
However, the price peak typically occurs around 500 days after a halving.
Currently, Bitcoin is trading at around $64,488, down 4.5% this week.
Bullish Signals:
Short-term volatility may occur, but the long-term trend remains positive.
The 1-hour and 4-hour charts show rising buying interest.
The daily chart indicates a rebound from recent lows, suggesting a bullish projection for the long term.
If support at $59,629 holds, we could see an upward trajectory.
Bearish Considerations:
Transaction fees have risen significantly post-halving.
Mixed signals from moving averages and neutral oscillators indicate uncertainty.
A failure to hold key support levels could trigger a bearish reversal.
Expert Predictions:
Analysts predict Bitcoin could reach anywhere between $150,000 and $300,000 post-halving.
Institutional adoption and overall market sentiment play crucial roles.
Caution is advised due to general market fluctuations.
Remember that Bitcoin’s price remains highly volatile, but its resilience and historical performance make it an intriguing asset to watch.