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Based on History, Bitcoin May Incur a Brutal Crash After Halving
Bitcoin rewards halving is scheduled to happen in the next eight days and there has been debate in the cryptocurrency space regarding its short-term influence.
It is undisputable that it will bring about a bullish price action in the long-term because it will cause a 50 percent annual inflation reduction for Bitcoin. However, in the short-term basis, its effects are quite speculative, and it is not easy to consider it historically due to limited data sets.
However, according to an analyst, the halving event is typically followed by a steep selloff when it is concluded, suggesting the eventual fleeting of the current Bitcoin rally.
Data suggests that expectation for the event is growing rapidly. Some market participants believe that the rally incurred by Bitcoin after its steep crash in March is due to growing expectation for the mining rewards halving.
A noteworthy point is that despite the possibility of this being a partial cause for the more than 100 percent rebound incurred within the previous several weeks, it could likewise be due to a huge technical strength from the “V-shaped” recovery observed in the days that followed its fall to lows of $3.8k.
Nonetheless, the number of people searching for “Bitcoin Halving” as shown in Google Trends suggests a notable worldwide interest in this event.
It seems the search volume for this term started becoming parabolic in the early days of April and it is not showing any sign of going down as the event is fast approaching.
More people are interested in this event majorly due to its likely short-term effect on Bitcoin price.
According to a renowned Bitcoin supporter known as PlanB in recent times, his very popular and controversial Stock-to-Flow Model predicts Bitcoin’s ascension towards $100k in the time shortly after this event. That is, Bitcoin will start a new parabolic rally in the months ahead. However, history appears to suggest a brutal post-halving selloff.
Only two halving has occurred before the imminent one; hence, we do not have enough data to conclude on what would happen this time.
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