Bitcoin's upcoming halving has been seen as a bullish event that will catalyze BTC's rally due to its influence on the inflation rate of cryptocurrencies and precedents that have supported this notion.
It is important to note that analysts have stated that the short-term effect of halving on the price action of cryptocurrencies is largely due to widespread investor viewing it as a price increase, while the Basic motivation of the event takes months or even years.
An important data shows that the hype surrounding Bitcoin's upcoming halving is starting to dwindle as the price drops, possibly suggesting that it won't have any short-term impact on the price of BTC.
Interest in the upcoming halving of Bitcoin is on the decline
Data from Google Trends provides an interesting insight into the correlation between Bitcoin price and interest in the upcoming halving event – scheduled for May 12.
The chart below shows the search volume for the terms “halving” and “Bitcoin Halving” in the United States over the past 12 months, showing a significant decrease in search volume since the end of February when BTC began The top fell from a high of $ 10,500.
Here it is with the terms quoted to reduce noise, for both the past 12months, and the equivalent period in advance of the 2016 halving: pic.twitter.com/rhriANoO4q
– Dan McArdle (@robustus) March 10, 2020
This seems to suggest that investors' interest in halving is entirely based on how it can affect BTC prices in the near future, which means that the ongoing sell-off will be invalidated. chemistry story that halving event will cause price increases.
An explanation for the drop in concern
In response, some followers came up with different interpretations of Google Trends data.
Investors Spot users have drawn attention to other metrics related to similar aspects. He stated that “Bitcoin halving 2020” and “Bitcoin halving” have decreased by 1,100% and increased by 550% in search volume by 2020.
He offers a potential explanation for Weisenthal's decline reports:
“I think many people use that search term to find the halving date range, once they know the date frame they don't have to search that much.”
It should also be noted that Bitcoin halving is still about two months away. Expected in early May, global Google interest remains higher than at any time during the lead to halving 2016.
With the remaining two months and the previous sharp increase in search volume occurring near the date of the event, it seems too early to draw conclusions about reducing Google searches related to BTC halving.
Simple factors related to the mining economy of BTC signal a price drop
There are a few simple factors related to Bitcoin's mining economy that seem to suggest that cryptocurrencies will see further downside in the coming days and weeks.
These factors have been outlined by Jesse Proudman of Strix Leviathan – a cryptocurrency hedge fund. He explained that a drop in BTC miner income due to a 50% reduction in inflation would limit the institutions' ability to access debt or equity.
"Bitcoin Miner: – Income is about to be cut in half after ~ 62 days. – Access to debt or equity becomes limited. – The balance sheet of other investments is omitted ".
– Income about to be cut in half in ~ 62 days.
– Ability to obtain debt or equity capital becoming constrained.
– Balance sheet of other investments evicerated.
Walk me through the bullish scenario here in the next 60 days? And S2F isn't it …
– Jesse Proudman (@jesseproudman) March 9, 2020
This impact could lead to some short-term damage to the network health of Bitcoin surrendered by smaller mining organizations and may further focus the mining power of cryptocurrencies in the hands of an amount. Small giant miners can overcome the short-term effects of events.
You can see the price of Bitcoin here.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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