Investors are uncertain of Bitcoin (BTC) prices after the hyped halving scheduled for early May 2020.
For this reason, the bull pressure on BTC price is low, and prices continue to slide since the expected demand is lower and investors cannot mop out coins, pumping prices higher, in readiness of halving.
Halving will Cause a Supply Shock
Considering the basic laws of supply and demand, assuming constant demand, BTC prices should rise as scarcity sets in.
However, ahead of the hyped and perhaps a definitive event, BTC prices are stagnant and consolidating in the daily chart.
This, according to one commentator hints of uncertainty from the investor side because if Bitcoin prices will surely expand in the next three months, naturally, investors would buy in, ramping up on every retracement in anticipation of at least a 2X return on investment within that period.
Bitcoin Halving: Priced in or Not?
It is his assessment that unsophisticated investors are currently buying BTC at an inflated price thanks to the ongoing false narrative of scarcity.
Why it's not about scarcity?
Because financial markets are forward–looking — speculation is about buying what you think will appreciate.
And so far, the interest in buying $BTC is lower than the interest in selling it, which is why the price goes down and fails to sustain.
— Yevgeny⚖️Devine (@yevgenydevine) January 23, 2020
He further added that halving will only be priced in once the event has been executed, and not before then.
“Why it’s not about scarcity? Because financial markets are forward–looking — speculation is about buying what you think will appreciate. And so far, the interest in buying BTC is lower than the interest in selling it, which is why the price goes down and fails to sustain.”
The halving is not just a "news event" and should not be treated as such.
900 less BTC hitting the market EVERY SINGLE DAY over the next 4 years.
It simply can't get priced in before it happens.
— Crypto₿ull (@CryptoBull) January 22, 2020
“80% of all investors will invest their entire life savings in an asset they know will appreciate just 2x in several years. If BTC’s scarcity is such a sure thing, why is there not enough capital to buy out the handy liquidity? Perhaps, because it’s not such a sure thing?”
The community is divided on whether BTC, at spot rates, has been priced in and it is trading at fair value in anticipation of the next halving.
Been bearish since 9k. I'm flipping here for multiple reasons. Long from 8410. think we see a big move up relatively soon and will reassess afterwards.
— glimmery (@Glimmerycoin) January 23, 2020
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Dalmas is a very active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies and enjoys the opportunity to help educate bitcoin enthusiasts through his writing insights and coin price chart analysis. Follow him at @dalmas_ngetich