What happens after the halving?
The third Halving Event electrifies the crypto community. In just under 7 hours it is finally time. In the run-up, users discuss the possible consequences. How will the miners behave? Was yesterday’s dump just a harbinger of a new bear market? We take a look at the current situation.
Bitcoin: Asset of the year?
It’s the perfect dramaturgy for a thriller: The underdog (Bitcoin) emerges from the crisis as the winner and punishes all critics with lies. In fact, the No.1 crypto currency is the top performer in 2020. Similar to gold, the digital currency is considered a crisis-stable store of value due to its limited reserves. As a result of the pending halving, the inflation rate will be curbed to a record-breaking 1.8 %. All these characteristics should sound like music to the ears of panicked investors, if it were not for the high volatility.
Volatility as a danger
On Sunday, volatility presented itself from its worst side. Within 25 minutes, the BTC shot down by more than 10%. Liquidations of long positions worth millions of dollars even pushed the price below the USD 8000 mark at times. At the peak of the price drop, countless users on Twitter reported disruptions on the Coinbase Exchange. This was a very bad time, reminiscent of the trading stop on Wall Street. With a market cap of around USD 236 billion, crypto space remains a smaller market by global standards.
Whales, FUD and FOMO
The largely unregulated market is a perfect place for speculators, risk-averse traders and fraudsters. SCAM messages have been damaging the scene for years and high quality technology has been pushed into the background by FUD (fear, uncertainty and doubt) and FOMO (fear of missing out). Whales weighing millions are able to manipulate prices. As a result, chart analyses lose their validity in some places.
Bitcoin price in Detail
It’s the calm before the storm. A few hours before the Halving Event the BTC is quoted at 8911 USD. This corresponds to a daily gain of a manageable 2%. However, it looks like the bulls will make a comeback. Now, with the USD 9000 mark, an important resistance is in sight. The 24 hour volume is approaching the USD 50 billion mark during this time (current value: approx. USD 48.5 billion).
Clear focus on Bitcoin
The Bitcoin Dominance Index currently stands at 67.5 %. The roles are therefore clearly distributed. All Altcoins share a market share of almost USD 80 billion. This results in a direct dependence on the No.1 crypto currency. Due to the halving event, the index could even rise to the 70% relatively quickly.
Don’t forget to fasten your seatbelt!
Crypto-friends worldwide are feverishly awaiting the and the tension could hardly be greater. In recent days, many indicators have suggested that the miners are still hoarding mined Bitcoin units. However, it will only become clear in the coming days how many miners will take their hash rate off the grid. The current reward for the miners is 12.5 Bitcoin per block mined. After the Halving Event this will be 6.25 BTC per block. Halving is an integral part of the ecosystem and is defined in the Genesis block. The Coin Rewards will be halved for the miner after 210000 mined blocks. This results in an ingenious side effect. The inflation rate of the crypto currency is sustainably reduced. Estimates assume a value around 1.8%.