However, despite falling into negative territory, analysts say the cryptocurrency will rebound to top $10,000 in this halving week.
Bitcoin price just turned positive after a volatile weekend saw it drop over 15% in hours to swipe over $1,700 from its value. Over Saturday and Sunday, BTC fell from around $9,800 to touch $8,100. The decline triggered a massive liquidation on the contracts trading platform BitMEX, taking out over $260 million worth of longs.
Bitcoin’s (BTC) price movements have wiped out recent gains, but investors could see it surge to retake $10,000 again this week
Despite massive volatility robbing it of momentum over the weekend, Bitcoin is set to retake $10,000 this week following its $1,200 CME futures gap
Bitcoin to rebound to fill futures gap
On Monday, Bitcoin’s price at the open of the Chicago Mercantile Exchange (CME) saw it lag CME futures by a massive gap of more than $1,200. It’s the largest gap between the price of Bitcoin and the futures which do not trade over the weekends.
Having closed Friday with BTC at $98,000, the CME Group futures opened on Monday with the top cryptocurrency at around $8,600. But the $1,200 drop may not be too high for Bitcoin bulls to navigate on the evidence of historical performances.
Gaps between the price of Bitcoin and its futures on CME have traditionally acted as a bullish signal. Historically, prices for Bitcoin have surged or declined in line with gaps with the CME futures. And even more bullish for investors would be a 2019 Market Science study that pointed out these gaps fill out 77% in the week after the gap forms.
That means that with Bitcoin’s halving hours away, there is high chance bulls will see it top out $10k within the week.
Bitcoin hash rate near all-time highs
Another bullish sign that a reversal is likely is Bitcoin’s network hash rate. This fundamental indicator has remained closer to its all-time highs that were recorded last week as BTC raced to hit $10k.
Data on network monitoring site Blockchain indicates that hash rate activity on the leading cryptocurrency’s network has increased despite the weekend crash. The hash rate shot to 136 TH/s up from 109 TH/s on May 9.
Bitcoin network hash rate (1 month chart)
Bitcoin in the past 24 hours has touched a low of $8,300 but crucially, prices have come close to hitting $9,000; hitting this psychological level will open up a move to $10,000 ahead of further bullish news and the halving in a few hours time.
Bitcoin Halving Arrives: Block 630,000 is minted by Antpool
Bitcoin’s (BTC) halving did not come with an explosion in price as anticipated, but miners could help push it higher if they stay on the networkMay 11, 19:23 UTC saw Chinese-based miner Antpool produce block 630,000 on the Bitcoin network, triggering Bitcoin’s third halving that drops block rewards from 12.5 BTC to 6.25 BTC
The 2020 halving, happening in circumstances reminiscent of the 2008 financial crisis, cuts mining rewards by 50%. The event is coded into the Bitcoin protocol and went from 50 bitcoins in the first four years to 25 units after the 2012 halving. The next halving in 2016 meant miners earned 12.5 bitcoins and now miners, who process transactions and secure the network by dedicating their computing power, will earn a block reward of 6.25 bitcoins.
Bitcoin’s landmark third halving was recorded when Bitcoin mining firm Antpool minted the 630,000th block on May 11, 2020, at 19:23 UTC.
Block 629,999 references iconic Nakamoto message and the 2008 financial crisis
The Coronavirus pandemic, and the massive bailout injections that have governments minting cash “out of thin air”, has the world teetering to a potentially catastrophic economic downturn. And so, in the final block minted before halving, Bitcoin miner f2pool embedded a piece of history recording these unprecedented times.
Block 629,999 was the last block that came with a 12.5 BTC reward for miners. It now holds a message that immortalizes 2020’s financial turmoil as captured in a NY Times headline, much similar to the iconic message bitcoin creator Satoshi Nakamoto embedded in the genesis block mined in 2009.
In the coinbase of that very first block, Nakamoto added this message “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
F2pool, likely drawn to the similarities, or even the probability of things getting worse added “NYTimes 09/Apr/2020 With $2.3T Injection, Fed’s Plan Far Exceeds 2008 Rescue“, to block 629,999’s coinbase transaction text.
The message references a NY Times article that discussed the Federal Reserve’s bailout plan as the Coronavirus pandemic’s impact on the U.S. economy intensified.
A total of 1,800 new bitcoins came into circulation before the 2020 halving. What the 50% cut means then is that for the next four years – until the next halving – only 900 new bitcoins will be mined daily. As such, the revenue miners collected from mining have fallen from around $15 million to about $8 million, if we go by the current rate of $8,600 per unit.
Bitcoin price has remained steady above $8,500 in the hours following the halving, and Bitcoiners are bullish for a near term uptick.
One of the indicators is the hash rate holding, with data showing that the network’s total computing power is near an all-time high. Current figures read 121 exahashes per second, with the 7-day average at 120 exahashes per second.