For crypto-bulls, optimism is an understatement. As we witnessed gains of 300% and averages that are still more than double the late-2018 lows, it’s safe to say the market is moving in a big way, even if it’s not quite where we want it to be (yet).
Early February kicked off the year quite well, reaching close to a 7% increase in under 24 hours–– the highest level since October of last year. The highest high of the year settled at roughly C$12,988 (US $9,745). Of course, none of this necessarily means we’re going to have a year like 2017, but we certainly are due for one.
Plenty of indicators are pointing up, rather than the inconclusive results that often arise from comparing the top few. The MACD histogram, Stochastic, Relative Strength Index, Parabolic SAR, and many more all signal a longer-term bullish trend.
“There are plenty of bullish narratives for bitcoin at the moment both fundamental and technical,” remarked Mati Greenspan, founder of Quantum Economics. He also further emphasized that “strong volumes and momentum” lie ahead for bitcoin in 2020.
The accumulation that closed out 2019 ended up breaking out, making higher highs and lows on higher time frame charts. It could test $7,200, and if it does and holds, it will most likely continue up.
We’re seeing a short-term downtrend as of this week, which may come as a surprise to some traders, especially those who watched the TSX and S&P display quite fear-inducing trends. With this decline, paired with the halvening swiftly approaching, as well as crypto’s macro-trend looking quite bullish, March alone is expected to be an interesting month.
What Is Bitcoin Halving?
For those who don’t know, the Bitcoin halving (also called the halvening), is essentially a scheduled decrease in mining rewards by 50%, thereby reducing the rate at which new cryptocurrency units are generated. Since miners often release their earnings right back into the market to cover the overhead associated with mining (hardware, electricity costs, etc.), this reduction in mining rewards helps keep the market regulated. Currently, for each mined block, 12.5 BTC are rewarded to the miner. This will halve to 6.25 BTC. It’s Satoshi Nakamoto’s approach to combating inflation.
Impact Of Factors Like Coronavirus
Unsurprisingly, things like the Coronavirus, Brexit, and the wars in Libya, Iran, and Iraq have a lot to do with the current fluctuations of late February. Price action isn’t just affected by the state of the world, either. It also has to do with the new crop of traders to enter the scene in 2019. Crypto’s humble beginnings involved mostly the cryptography crowd and the few and far between tech-savvy risk-takers exploring new financial prospects. Now, however, institutional interest has skyrocketed BTC’s visibility and potential.
With the TSX performing its worst week since 2008, combined with the upcoming BTC halving, it’s safe to say that the use case for bitcoin as a hedge against the stock market––like gold––is growing every day.
Armed with this knowledge, it can be said with confidence that we’re in pretty good shape and the future looks good for Bitcoin. Even if we’re in a micro-bear trend at the moment, everything points to a future macro-bull trend.
Important note: This content is for informational purposes only. Investing in cryptocurrency or tokens is speculative at best as the market is largely unregulated. Anyone trading cryptocurrency should prepare themselves for a loss due to its volatility. Coinberry is neither licensed nor qualified to offer trading advice.