How did the price of Bitcoin react after the halving
How did the price of Bitcoin react after the halving
Trading

How did the price of Bitcoin react after the halving

By Federico Izzi - 12 May 2020

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After the halving, the price of Bitcoin has not changed particularly from the levels it has been recording since Sunday, with fluctuations in a range of $600, which sees the price move between $8,300 and $8,900. 

Today marks the start of Phase 4 for Bitcoin. Last night, a few hours ahead of the time estimated over the past few weeks, the 629,999th block was exceeded. At the 630,000th block and for the next 210,000 blocks the miners will receive a prize of 6.25 bitcoins for each completed block. 

There was a lot of excitement in the previous days, with a bitcoin halving fever which saw prices rise to $10,000, levels that Bitcoin had abandoned towards the end of February. 

From last Friday’s highs, Bitcoin put the reverse gear and speculation pushed prices back below $8,500, cancelling the rally that had characterized the first 9 days of May. 

Halving fever over the weekend saw high trading volumes with the highest peak of volumes on a Sunday recorded on May 10th with over $3.5 billion traded on Bitcoin alone. 

Yesterday, with the reopening of exchanges on institutional platforms, other records were achieved: the US CME platform saw exchanges for a counter value in dollars of over $914 million, the second record since the launch of futures in December 2017 on the CME markets; second only to the peak of 1.1 billion recorded last February. 

The other institutional platform, Bakkt, also recorded exchanges of about 42 million dollars, just below the record recorded last December 18th, 2019. However, when adding to the physical Bitcoin exchanges the possibility that Bakkt offers for cash exchanges, yesterday Bakkt recorded the highest peak ever since it was launched in September 2019.

Not only that: adding these record-breaking volumes to other unregulated brokers and exchanges offering trades on Bitcoin futures, yesterday was the 5th record-breaking trading volume

BTC futures aggregated volumes show that all 5 highest records were recorded during 2020 and three of these in the last 15 days, starting at the end of April.

This shows that the period is particularly hectic, not only for the searches that have taken off as recorded by Google Trends, multiplying the volumes by 5 times compared to the previous halving of 2016, but also how high the interest in trading and liquidity is. 

Last week’s records on CME’s open interest in derivatives showed that liquidity is not just passing through but is bound to remain. This is one of the clues that has also supported the rally in recent days. 

In the coming weeks, it will be important that the bullish movement of the last few weeks and which continues to remain valid after the mid-March sinking finds further confirmation.

Bitcoin, since the beginning of the year, has recorded a positive balance of about 20%. Ethereum does much better, in spite of the difficulties of these days and a trend that has not followed Bitcoin, is trying to restore confidence with an increase that since the beginning of the year goes beyond 45%. 

In addition, Ethereum is getting closer and closer to the launch of the futures of the main US CME market. The arrival of futures on ETH is a novelty of the last few hours that has quietly passed and that will most likely become evident in the coming days.

The first regulated futures were launched yesterday on ErisX, which presented the first futures contracts traded on the US exchange and this opens a new era also because they are structured delivery futures based on ETH/USD with monthly and quarterly maturities, regulated on the CFTC, the latter aspect indicates that these futures have passed the controls and evaluation by the US financial bodies including the SEC. 

coin360 20200512
Source: COIN360.com

The post-halving crypto market

The day sees a slight prevalence of green signs. In the top 10, there are only two negative signs, that of Ripple (XRP) just below par, while Tezos (XTZ) slips under 1%, remaining stable in its solid 10th position.

ADA 20200512

Among the big ones, the best rise is that of Cardano (ADA), in 11th position which today gains 8%. The best of the day is Augur (REP) which rises 15%, just like Theta.

On the opposite side, there is a deep descent of 9% for both 0x (0X) and Aave (LEND), caused by profit-taking after the three-figure rises of the last few days.

The market cap remains just above the $240 billion threshold, after reaching $270 billion, a 30 billion decline that does not currently spoil the positive trend that has been registered since mid-March, even if the trip in recent days affects the performance in May recorded until the end of last week. 

The dominance of Bitcoin remains above 67%, this erodes the market share of Ethereum that remains below 9%, as well as Ripple that falls below 3.5%, lowest levels since December 2017.

BTC 20200512
Bitcoin chart by Tradingview

Bitcoin (BTC) after the halving

The price of Bitcoin fluctuates around the balance threshold of $8,650-8,700, levels where it has been since last Sunday’s drop. 

Prices remain within a bullish channel that started from mid-March lows. The first sign that it will give some trouble is a possible sink to Sunday’s bearish spike levels at $8,100, above this level, the fluctuations are not a cause for concern. A very positive sign will be the recovery of $9,200 in the next few hours or days.

ETH 20200512
Ethereum chart by Tradingview

Ethereum (ETH)

Yesterday, just before the Bitcoin’s halving party, Ethereum experienced a descent to test the crucial level of $175, the key support level that triggered the reaction that brought prices back to the equilibrium threshold marking the oscillations after last Sunday’s sinking. 

Ethereum violated the bullish channel that characterized the mid-March movement. Now it is necessary to recover the 195 and the psychological threshold of $200 as soon as possible. 

Otherwise, the break of the $175 would push prices to test the $155. For ETH it is necessary not only to recover the $200 but to return to the $210 area as soon as possible to drive out further bearish dangers.

 

Federico Izzi
Federico Izzi

Financial analyst and independent #trader – S.I.A.T. & Assob.it partner. He operates actively on stock and derivatives markets (futures and options) since 1997. A precursor of cyclic-volumetric analysis he is known for having identified the most important upward and downward movements in the financial markets of recent years. He participates annually as a speaker at the ITForum in Rimini since the 2010 edition and InvestingRoma and Napoli since the first edition of 2015. He is a guest and market expert on the "Trading Room" and "Market Driver" broadcasts of Class CNBC, Borsa Diretta.tv and on the evening news of Traderlink. Since July 2017 he is a permanent guest on LeFonti.TV, the only weekly national space dedicated to cryptocurrencies alongside the most important international experts in the field. He was interviewed as a cryptocurrency expert for Forbes Italia, Panorama, StartupItalia and DonnaModerna. He was recognized as the first Italian technical analyst to have published the first secular cyclic analysis on Bitcoin. Periodically publishes articles on ITForum News, Sole24Ore, MILANOFINANZA, TrendOnLine and Wall Street Italy. Federico Izzi is... "Zio Romolo".

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