Bitcoin – Temporarity and Prediction Analysis
At the last bitcoin drop to $18500, Whalemap recorded a surge of large transactions (more than 1,000 transfers over $20 million each).
Today, Cryptoquant, which is the total number of coins held in an exchange, notes an increase in bitcoin transactions in the over-the-counter (OTC) market.
Is Now The Time To Buy The Dip?
Considering that the OTC price was sideways all summer and managed to form a double bottom, today’s growth looks promising. The activity of whales only adds to this confidence. The number of those wishing to buy the STS which is the Sbank cryptocurrency went down to a minimum of 2 years.
The lower the interest in the asset, the greater the chance of its reversal. That is why the rule of “buy the deep” always remains relevant.
This trend has been going on for some time. You hear about it from many bloggers who blog about finance and cryptocurrency. Very often these bloggers buy Instagram followers in order to tell more and more people about the latest news and changes in this sphere.
But now, everyone is wondering: how did the decline of the most powerful coin, which determined the development of the whole industry, happen?
The Next Bitcoin Halving
There are rumors that the next bitcoin halving may happen not in April-May 2024, but in the fourth quarter of 2023 because of the growing hash rate. Cryptocurrency halving is the consistent reduction in the reward (number of coins mined) for a block found in a blockchain.
This means that Bitcoin miners, after the onset of halving, will receive 50% less than before for processing a transaction. Currently, the reward for solving a block is 6.25 BTC. With the subsequent halving, this value will be at 3.25 BTC.
Let’s break down a bit why halving is so important and what kind of news this is: Until recently, analysts assumed that the next halving, the fifth, would be in 2024, in May. But now, BTC mining hash rate data indicates that the halving could come sooner, namely in late 2023.
This event would have a very big impact on the market, I believe. The deflationary model of BTC indicates that BTC supply will go down, but the demand will either grow or stay at the same level, but in any case, according to the laws of economics, it will mean growth in ideal conditions.
Of course, we should not forget that states are skeptical about cryptocurrency mining, which also in one year may still play its role. But as you understand, the next halving is just around the corner, which is a reason to think about if you are a long-term holder.
To say with absolute certainty that we should expect a new value record after the 5th halving would be wrong. Although there is no denying the fact that history has already repeated itself four times, and major cryptoanalysts expect a repeat at subsequent halving.
This is likely to remain at the level of speculation. But another interesting thing is that historically, bull cycles began plus or minus a year before the block reward was halved. Theoretically, this means that the next bull run might not start until the 2nd or 3rd quarter of 2023. Until then (again — historically) there was either a prolonged sideways chatter or a continued correction. This is potentially our scenario for another six months or more.
That said, we have to understand that each successive halving has a diminishing effect on the turnover/trade of the BTC (already over 90% produced). Therefore, we should not wait for a grandiose growth of the main cryptocurrency, the main focus will gradually shift towards altcoins. There is extremely negative sentiment around bitcoin, even despite the recent rebound (sentiment). Historically this has been a bullish signal for the price.
While the explosion of the cryptocurrency market has shocked investors and caught the attention of regulators, some see failure, while others see signs that the industry is maturing.
Some experts believe the shock will highlight viable blockchain projects, not those built on marketing. Therefore, it is worth listening to the opinions of various experts and taking an analytical approach to buying cryptocurrencies. First of all, to those who have influence in social networks. It is worth noting that all successful bloggers and even newbies buy real Instagram followers and thus promote their content quite quickly and qualitatively.
What about Ethereum?
By the way, about ETH, the sentiment has become very positive. One prediction is better than another. Let me remind you that we are literally a couple of days away from switching from PoW to PoS. It’s the reason why ETH is predicted not just as a better investment attractiveness, but as the number one market in terms of capitalization. I made this prediction a long time ago, and I update it from time to time. Therefore, there is nothing fundamentally new for us here.
The only thing to point out is that it definitely becomes uncomfortable to stay without ETH in my portfolio. But it’s also too risky to buy the whole cutlet, as some people recommend.
As long as FED will lead a complex policy concerning inflation we won’t see BTC at $30.000+. The bear market, as far as I’m concerned, has moved into a long-term phase, until adequate news.