Bitcoin Halving Impact Fades as Demand Takes Center Stage
According to reports, the Open Interest in Bitcoin is now 30 times higher than it was 11 days before the 2020 Bitcoin halving.
Bitcoin price surpassed $14,000 USD yesterday, marking the first time it broke this level since January 2018.
The date also happens to fall on the 12 year anniversary since Satoshi Nakamoto released the Bitcoin whitepaper, making it a bullish birthday for the cryptocurrency
Since the launch of Bitcoin in 2008, the market has seen an enormous surge in popularity, growth, intrigue and adoption. The token’s return on investment (ROI) boasts a staggering over 9000% since its launch. As a result of several bull rallies, major investors advocating the cryptocurrency, and a burgeoning market, Bitcoin has become a hot new option for investment.
Bitcoin price healthier than ever?
As it heads into its 13th year of existence, Bitcoin seems to have found a non-volatile point of strength. With positive sentiment surrounding the cryptocurrency as well as factors lined up for a surge, Bitcoin’s performance seems to be primed to peak.
On top of its price, Bitcoin has become somewhat of a safe-haven asset against the US Dollar. With historic data and insights available for over a decade, the trends that have emerged show that when the economy is doing poorly, Bitcoin price performs well. This inverse relationship is likely as a result of the digital currency acting as a hedge against the fiat market.
This relationship has been especially prominent following the global pandemic this year, where economies across the globe have struggled to maintain any stability.
Later down the line: Bitcoin halving set to rally the crypto market?
Every four years approximately, the Bitcoin halving occurs, which slices the reward that miners receive from mining new Bitcoin. Since Bitcoin is limited in its supply, the mining event ensures that the rate of production slows as demand grows. Historically, approximately eighteen months after each halving, Bitcoin price sees a spike in price. Given the fact that Bitcoin is sitting at a healthy state of stability, if the price does surge, it will possibly be at an exponential level to hit new record highs.
Price rejection at $14,100 USD not necessarily a bad thing
As Bitcoin peaked around $14,100 USD, it saw a quick correction and rejection and fell back 3% on most leading exchanges With a lot of the selling pressure coming from leading cryptocurrency exchange Binance, the market might have been rattled.
However, a minor dip in price doesn’t spell doom for the market’s trajectory. If Bitcoin finds a new support level and faces a minor correction in the process, it offers better support than if the market floods and then dumps.