Nobody knows exactly what lies ahead. I’m afraid a crystal ball that really works has not yet been invented. Marty McFly in his DeLorean could go ahead and see what it was like. But unfortunately in the last film I think that the time machine was destroyed by a train. It has always been said that if we know the past, we can predict the future. Although the matches are specified, the target is not written. Yes, we can speculate. We can examine the probabilities. We can imagine possible futures. But we will certainly not be right, at least not entirely. However, it is still a healthy exercise. You can guide us and help us make decisions today. Let’s make a diagnosis of our situation and take on the stupid task of speculating about tomorrow. What can Bitcoin expect in May?
We are in great uncertainty and our future will surely be a big surprise. That means we have to prepare for the unexpected. This old cliché doesn’t tell us much, but that doesn’t mean it’s not true. The root of our uncertainty is that our current situation is very atypical. The past cannot tell us much on this occasion, as our present is quite far from the old patterns. It’s true. May is Bitcoin’s third halving month. Without a doubt the most anticipated event of 2020. On this day we will eat pizza with our crypto friends and celebrate in our own way. Halving is of course an important event. It marks the beginning of a new cycle. It feels like a new year because it is full of hope. Halving is a symbol of crypto prosperity.
Read on: According to Changpeng Zhao, halving is not the only factor that can affect Bitcoin’s price
After the last two halves, Bitcoin has seen amazing gains. The halving in 2012 was followed by the spectacular year 2013. The halving in 2016 was followed by the historic year 2017. We therefore assume that this pattern will be repeated for the third and all other halving. Of course, when we talk about the effect of halving on the price of Bitcoin, we are not talking about superstition. It is not that we saw the image of a virgin on a tree and we pray for the “miracle”. The halving is a decrease in the flow of new bitcoins, which is clearly putting upward pressure due to the declining supply. However, the offer is only part of the equation.
Offer is not important without asking. And don’t just ask. We are talking about a demand growth (percentage) that is large enough to show a significant price increase comparable to the last two halves. Here is the little detail of our current situation. We have two new items during these halving that we didn’t have during the first two. The Great Depression of the Corona Virus. 2012 and 2016 were years of prosperity. Both events occurred in the middle of the bullish cycle that began after the 2008 crisis and ended with the arrival of the corona virus.
Read on: In less than two weeks, some experts are warning that halving Bitcoin may end with no noticeable impact
Whether you like it or not, Bitcoin is a high-risk asset due to its high volatility. It has never gone through a crisis and this would be the first. As expected, his behavior during the coronavirus crisis has shown a very close correlation with the stock markets (S P 500). Bitcoin’s price did not go to the moon, as many cryptanalysts had predicted (error). On the contrary, investors panicked and fled. Of course, the price collapsed with all other markets at the same time.
It is clear that Bitcoin is currently traded at discount prices. The market does not reflect its true value and is undervalued. Investors are panicking about the crisis. And the fear of the crisis lay in regulatory uncertainty. This has resulted in a very uncharacteristic long side behavior for Bitcoin. The RSI (long-term) is very close to 50. And it was never so low before halving. The relative strength index (RSI) is a technical indicator that shows the trend of a market on a scale from 0 to 100. 30 is oversold and 70 is overbought. Well, this indicator has never been so sideways before halving. It is difficult to determine what this really says about the future, and it is also an unusual situation.. In summary, the old models are not very useful in this scenario. The atypical tends to create the atypical.
Another very relevant factor of this halving in relation to the last two halving is our size. Bitcoin was very small in 2012 and 2016. Few had heard of Bitcoin, and the existing relationship between community and new income was extremely favorable. Let’s say the Bitcoin community had 3 million in 2016 and we could now be around 20 million. (I don’t know) Well then, Bitcoin is now much better known and it is difficult for us to have an existing community-new income relationship as good as before.
Read Next: Bitcoin’s Next Halving: Do We Share or Will We?
In summary, Bitcoin’s prehaling behavior is an outlier, we are in the middle of a global crisis and our current size makes us slower and harder. You could say that this is a pessimistic picture. But not necessarily. We have bearish and bullish variables in full confrontation. Halving creates upward pressure. On the other hand, the crisis is putting pressure down. Bearish because demand is falling, but that won’t be forever. We cannot forget that there will be a recovery after the crisis. L.Impulses and rescue plans will fill the world with money and sooner or later go directly to the financial markets. Bitcoin will have money to grow aggressively. That’s not bad
All markets fell, but not every day was bad. In fact, better air has been breathed in lately. The unconflation plans have brought new optimism and the market is reacting positively. Investors acknowledge that Bitcoin’s price is currently too low. Sure, there is still a lot of fear. And it is possible that reversals follow these upward impulses. Perhaps we have great volatility due to the indecisiveness that such a special situation creates. We go in the dark, on the one hand very bad news and on the other hand very encouraging news. We don’t know what the future really holds for us. However, a certain instability would not be rare.
Well, you don’t have to waste a lot of time predicting. The future is too changeable. What will happen in May? I don’t know I just know that I won’t sell a drop of Bitcoin and try to buy as much as I can. I don’t care what happens in the next few months. My belief is in the great future.