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Positive “in chain” activities during the countdown to halving Bitcoin

May 10, 2020

We almost hit Bitcoin’s third cut, in which the network halved the block reward from 12.5 Bitcoin (BTC) to 6.25 BTC. This event recently sparked strong interest in the market where Bitcoin exceeded $ 10,000 on May 8, 2020, is fully recovering from Black Thursday’s collapse. Meanwhile, the total capitalization of the cryptocurrency market has exceeded $ 270 billion.

Market activities in the chain developed positively and turned around after Black Thursday

From May 8, 2020 The bitcoin network hash rate has reached a historic high and the level of difficulty has increased to 16.10T. Recently added and active addresses rose 22.52% and 13.03%, respectively, compared to the seven-day average, of which the number of active addresses reached almost one million addresses.

Active Bitcoin addresses

Positive “in chain” activities during the countdown to halving BitcoinPositive “in chain” activities during the countdown to halving Bitcoin

The current number of active addresses for the Bitcoin network has reached a local high that was only exceeded by the number of active addresses at the end of the bull market between late 2017 and early 2018, and is rapidly approaching the same level in mid-2019 when the price was 13,000 Was US dollars.

Google Trends reflects the great popularity of bitcoin halving

The current search interest for the keywords “Bitcoin halving” peaked at 100 in the first week of May 2020 and exceeded the second halving, which took place in July 2016, more than four times. The market participants are excited to see how the market dynamics could change after this event.

Bitcoin halves search interest over time

Europe has now become the most enthusiastic region for halving Bitcoin. Malta is among the top 10 regions in the last 30 days for search interest, followed by St. Helena and Luxembourg. These regions have a positive regulatory framework to support the cryptocurrency industry. Among them Malta has the most active regulatory stance on cryptocurrencies and recognizes the legal status of cryptocurrencies in its region.

Bitcoin halves search interest by region

Surprisingly, last month Africa had an unusual stance on bitcoin halving with Nigeria fourth in pursuit of interests and South Africa seventh.

Bitcoin’s Mayer Multiple reflects positive feelings

Bitcoin Mayer Multiple is a price analysis indicator created by Trace Mayer as a method to measure the current price and historical long-term price history of Bitcoin.

A Mayer multiple of less than 1 means that Bitcoin’s current price is below the 200-day moving average and market sentiment is negative and trending down. Conversely, if the Mayer multiple is greater than 1, the current market mood is generally optimistic and supports the upward trend in BTC prices.

Bitcoin Mayer several

Bitcoin’s Mayer multiple fell to 0.574 after the market crash on Black Thursday and was in a phase of extreme panic. Since then, it has recovered and has continued to rise above 1. The market expectations for halving bitcoin have started to materialize and the fear of being lost, or FOMO, has started to spread to the market.

The miners ‘position index and the miners’ mobile inventory show that miners expect positive market momentum after halving

The mine position index (MPI) is a measure of the current behavior of miners. An MPI value above 2 is essentially a longer term macro structure analysis where a value above 0 could indicate local sales opportunities in the short term and if the values ​​go into negative extremes it could indicate local buying opportunities (if miners save bitcoin) .

Bitcoin: miner's position index

Interestingly, when analyzing from a macro view, the MPI values ​​have been consistently below 2 since the upward trend in 2017. From a micro-trend perspective, the values ​​are generally below 0, which indicates that miners are more likely to save their Bitcoin. Between late 2019 and early 2020, there was only a short period in which the MPI values ​​reached more than 0, possibly due to the capitulation of some miners.

The Miner’s Revolving Inventory (MRI) is mainly used to measure changes in the amount of bitcoin stocks held by miners.

Rolling inventory of the Bitcoin miner

As of May 8, 2020, one-day, one-week, five-week, and 12-week MRIs generally returned to about 1.

Miners generally kept their Bitcoin from January to March 2020. Shortly before Black Thursday, miners comfortably sold in a strong market offering that was well above 1 on March 11, 2020 at 1.63. The crash miners have after placing on the market however, is committed to saving again.

MPI and MRT offer unique perspectives for miners with different approaches. Although the interpretations of these two metrics are different, they both point to the same behavior of miners who generally tend to save Bitcoin before halving.

Opportunities with uncertainties on the world market

In the long run, Bitcoin presents itself with important innovations for the world that generate disruptive ideas, market interests and opportunities that many can use. In the long term, we expect that halving, along with the gradual maturity of the industry, will continue to gain ground around the world.

However, the direction of the cryptocurrency market can also be easily influenced by many market factors. Towards the third halving in the Bitcoin era, the impact of the COVID-19 pandemic and the direction of the traditional financial market are still unclear. These uncertainties can potentially impact the cryptocurrency market and create a domino effect that creates significant volatility in the short term.

This article was written by Johnson Xu y Catch Chou.

The views, thoughts and opinions expressed here are reserved exclusively for the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Johnson Xu He is a dedicated fintech expert with a background in finance and computing and a significant exposure to the cryptocurrency / blockchain industry. He is currently the chief analyst and leads research initiatives at TokenInsight, a company that provides investment research, ratings, data analysis, industry insights, investment management services, industry advice, etc. His previous experience includes a world-class global cryptocurrency exchange and a Fortune 200 consultancy.

Catch Chou He is a blockchain lover with proven work experience in the blockchain industry. He is currently a senior analyst at TokenInsight, a company that provides investment research, ratings, data analysis, industry insights, investment management services, industry consulting, etc.

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