Editor's Note: This article comes fromCointelegraph Chinese (ID: CointelegraphChina), Author: SHIRAZ JAGATI, reprinted with authorization by Odaily.
Editor's Note: This article comes from
Cointelegraph Chinese (ID: CointelegraphChina)
Cointelegraph Chinese (ID: CointelegraphChina)
, Author: SHIRAZ JAGATI, reprinted with authorization by Odaily.
Also, it’s worth mentioning that Bitcoin has nearly tripled in value since March 12, when its price fell to around $3,867. Nearly 85 percent (25.79 million) of all bitcoin addresses in all wallets can currently sell their bitcoin holdings for a profit, according to a report published by blockchain research firm IntoTheBlock.
Armed with all this information, it's worth digging into the question of what exactly its key market indicators suggest about Bitcoin's future after the halving, and whether Bitcoin is destined to cause significant financial growth -- which is also Since the beginning of the year, many experts have repeatedly pointed out the problem.
Related Article: Top Experts Make Bitcoin Price Predictions As Bitcoin Halving Looms
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Bitcoin vs. Bitcoin Fear and Greed Index
He also believes that as the halving approaches, the level of greed in the F&G Index seems to increase exponentially, adding that this phenomenon can be largely attributed to the above-mentioned events.
Similarly, David Waslen, CEO of blockchain forecasting platform HedgeTrade, believes that with the Bitcoin halving less than a day away, Bitcoin is hovering in the neutral range of the Fear and Greed Index, getting rid of excessive fear The long-term bearish trend in the range. “With record volumes and all the money pouring into stablecoins (easily transferred into Bitcoin), this neutral phase may not last for long,” he added.
Jeffrey Liu Xun, CEO of XanPool, a peer-to-peer fiat currency gateway, agrees with the above point of view. He believes that although Bitcoin's "fear and greed index" has been showing signs of neutrality, the greed element seems to be taking over and growing at a fairly rapid rate. Xun further stated:
"The F&G index just moved from 'Extreme Fear' to neutral range, and appears to be moving into 'Extreme Greed' range."
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The impact of halving on computing power will be obvious
The Bitcoin halving is a major event that most in the cryptocurrency community look forward to every four years because it directly relates to the supply and demand of Bitcoin. While the halving doesn’t always correlate directly to Bitcoin’s Fear and Greed Index, it 100% definitely has an impact on Bitcoin’s hash rate. This is because, after the halving occurs, the block reward decreases, which leads to a significant increase in the requirements related to mining efficiency.
“In the short term, we may see some miners unable to continue mining. This means that the computing power may be reduced. However, as mining machines and miners become more efficient, computing power will gradually pick up.”
Similarly, Marie Tatibouet, chief marketing officer at bitcoin exchange Gate.io, noted that, based on historically documented data, the network’s hash rate typically rises gradually after a bitcoin halving — but after the halving After half a month, the computing power will drop again. She further said:
“Hashrate rose rapidly in 2017 after the second halving. If we believe these data trends, I think that within a month of the halving, hashrate will rise.”
Finally, many experts also tend to agree that hashrate is likely to rise in the near future, as a large number of Bitcoin miners may have to start pooling their resources to keep operating in it. Not only that, but it is entirely possible that day-to-day mining in this emerging field will be dominated by a small number of individuals or groups with large-scale mining machines and the necessary capital to withstand the threat of block reward reduction.
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The reduction in Bitcoin’s block reward will become immediately apparent, with the number of bitcoins received per block falling from 12.5 to 6.25. According to Lai, this reduction is likely to force smaller miners out of business and lead to greater selling pressure, which in turn may cause the cryptocurrency market to turn bearish in the short term. However, in the long run, Lai believes that the price of Bitcoin will rebound, as Bitcoin has started to prove itself as a safe-haven asset from a macroeconomic perspective.
Furthermore, if Bitcoin’s hashrate drops after the halving, then historical data seems to suggest that Bitcoin’s price will likely drop with it. In this regard, looking at the data from 2012 and 2016, the price of Bitcoin has risen before each halving and fell back shortly thereafter. Also, in both cases, over the medium term, Bitcoin's price surged 10,000% in 2012 and then another 2,500% in 2016.
Xun also believes that Bitcoin may experience a price drop in the short term. In this regard, he clarified: "I see a partial top about 2 days before and after the halving. Then Bitcoin will be lower than this price in the short term." However, the HODL Moon podcast "Dark Side" (Dark Side) ) co-host Kade Almendinger is adamant that any potential future gains in bitcoin may already be priced into its existing bitcoin value. He added:
“We’ve seen a rally in bitcoin prices from April 28th to 30th, then a sell-off pullback later on April 30th. Bitcoin rose again on May 6th and seems to have some support at $9,200. Bulls Likely to push the price of Bitcoin higher before the halving, I would not be surprised to see Bitcoin reach $10,000 before the halving, with a modest sell-off and price correction after the halving.”
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Considering the price surge following the previous two Bitcoin halvings, it would not be surprising to see a similar surge for Bitcoin in the near term. This time, however, due to the ongoing COVID-19 pandemic, experts are eagerly waiting to see how the current situation will affect the future of Bitcoin, especially as the coronavirus continues to roil stock markets around the world. On this issue, Tatiboue said:
“I think the COVID-19 pandemic is playing a huge role on a larger scale. Initially, it caused some anxiety among the investor community, and then it eventually stabilized. After the outbreak of COVID-19 in China, we’ve seen a lot of activity on the platform. Bitcoin transactions have increased. I think the increase in Bitcoin transaction volume in general is the reason for Bitcoin’s recent recovery and eventual stability.”
Similarly, Lai also believes that the current cryptocurrency market remains cautiously bullish despite the COVID-19 crisis that has plunged the global economy into the Great Depression. In this regard, he added:
“Central banks in most countries have been considering other non-monetary asset classes. However, they have their limits when it comes to protecting against the risks of a global lockdown triggered by COVID-19, especially in equity markets.”
Is Bitcoin’s Momentum All From FOMO Sentiment?
In order to assess whether Bitcoin's current momentum is sustainable or simply a general fear of missing out (FOMO), it's worth considering that the ongoing optimism surrounding the crypto industry may be due to the fact that the Bitcoin network has matured over the past decade to As for it now supports hundreds of exchanges, futures markets, loan projects, wallets, trading platforms, and various blockchain-based financial applications. To this, Waslen added:
“People are definitely going to be bullish, maybe some of it is based on the hype. But that’s also all the building that has been going on, plus Bitcoin has the world’s largest decentralized computer that provides security for users around the world. For a decade, it’s been very Robust, not hacked, and exceeds the ROI of every other asset (last decade).”
Finally, Gauthier believes that the pandemic has prompted traditional financial players to reassess their long-standing beliefs that many mainstream corporate entities have begun to view Bitcoin as a legitimate store of value, which he believes has implications. Helps become the driving force for Bitcoin.
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