Bitcoin Halving: A Non-Event

On Saturday the 420,000th block of Bitcoin’s blockchain was mined by F2Pool. It was the first block to receive the reduced reward of 12.5BTC. To date, 75% of Bitcoin has now been mined. I am sure this number is going to start weighing in heavily on people’s perception of buying, selling and holding Bitcoin.

Price action on Saturday was fairly disappointing with most of the volatility occurring in the weeks up to and including Brexit. For those who were asleep the past few days here is a roundup: the price generally exhibited a downtrend leading up to the halving event with a harsh dump a day before. This dump took us down from $680 to a double bottom at $610, but bounced back to an ominous local high of $666.66 on Bitfinex. It now is consolidating between $640 – $670.

Bitfinex did have a quick move down to $620 but again bounced back strong above the $640 level. MACD and Bollinger Bands have been since tightening, confirming a consolidation in price right now. I believe that general mood is still positive, with the recent rally up to $790 still fresh in traders’ minds. Furthermore, fundamentals remain skewed to the upside for Bitcoin, given that we may see a QE4 after Brexit. Many advisors are now suggesting it’s a “no brainer to hold Gold” (typo – Bitcoin) in a diversified portfolio.

This points to a forthcoming upside breakout for Bitcoin which should test $700 – $750 resistance levels. If the price fell towards $600, I believe this would prove short lived as traders rushed to buy cheaper coins.

Trade suggestion: Go long XBTUSD with a stop below the support level of $640. Look to take profit around $700 – $750.