And while most crypto supporters expect the cycle to repeat, one Bitcoin expert is warning that it could take another over 100 days to reclaim the pre-halving peak of $10,000.
More Miner Capitulation Could Be Coming, But Is As Bullish As It Gets
In a previous NewsBTC report, CEO of Blockware Mining and hedge fund manager Matt D’Souza warned that extreme capitulation is likely coming post-Bitcoin halving if the asset continues to trade sideways.
The only way to prevent prices tanking as a result of miners capitulating is if a FOMO rally sparks within the next several days.
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$10,000 has acted as a “FOMO trigger” in the past, but Bitcoin price has made two failed attempts to stay above the critical level this year alone.
Since the bear market started, the asset has traded very few weeks above that price. The next time Bitcoin holds above it, however, could be the last time the asset ever trades below five-digit prices again.
Another 100 Days of Sideways Possible Before Bitcoin Breaks $10,000
It may take Bitcoin yet another 100 days before another attempt at $10,000 is made, according to past data. Post-halving capitulation in the past has caused a drop of 28%, followed by over three full months of trading sideways before a breakout occurred.
A prominent Bitcoin expert warns that crypto investors should mentally prepare for such a scenario.
During the 2016 halving, the price went sideways for 9 days and then had a 28% drop, and it took 100 days to get back to the halving price. Mentally prepare yourself for the efficiency cleansing and difficulty adjustment as the protocol prepares all passengers for launch. pic.twitter.com/5dNcs0ZnJ1
— Preston Pysh (@PrestonPysh) May 12, 2020
That breakout, however, sparked the next bull market and took Bitcoin price to $20,000. A breakout above $10,000 may be worth waiting for if the cycle starts again and the cryptocurrency trades towards a new all-time high.
Each halving cuts the BTC block reward miners receive in half. The reward just dropped from 12.5 BTC to 6.25 BTC overnight, but the cost in energy to add each new block to the blockchain remains the same until difficulty drops.
Difficulty only drops when miners capitulate and shut down their machines. This happens when profitability goes out the window, and less efficient miners are forced to sell their BTC.
Each halving caused a purge of the least efficient miners putting the most sell pressure on the market. Although there may be another 100 days of this balancing out, the end result is extremely bullish.
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With less efficient miners out of the way, more efficient miners hold onto their BTC to sell it at much higher prices during the next bull market peak. But its that holding process itself that appears to kickstart each bull market.
Once those 100 days are up, Bitcoin could see a new all-time high.