Bitcoin (BTC) Rallies Toward a Two-Month High Ahead of Next Week’s Halving Event? Is this Something to Watch Out For?
I was watching the number of traders who were willing to place a buy and sell trade immediately on the news that the Bitcoin(BTC) would begin “halving”. That means that for every block mined, only 50 BTC will be created, the rest will be reserved for new coins. Yes, this was reported as fact.
I am reminded of all the time when all the Wall Street traders were watching for the day that the price would drop as soon as they found out about the halving. As it turned out, the price went up after the halving event, well ahead of schedule.
This rally pattern has been forming and has been steadily increasing in size and profitability. I have seen many people, including many Forex Traders, put their money in and take profits because of this rally pattern. Some have even done it multiple times.
I have seen people arguing that this event would be bullish for Bitcoin(BTC) and an additional reason to short this precious metal. It would seem that some of these arguments are valid.
First, the halving event is something to watch for. With the rise in the price of Bitcoin(BTC) comes the chance for more profit.
Second, I have seen individuals who did not know what they were doing to start a buying price at. They took profits at the last minute, so if you are like these folks, you may think the price has gone too high and it is time to put your money in.
Third, many traders are unsure of how to react after the news of the halving. They may have been hoping for a flat rally or maybe they want to wait until after the second half of the year to get a good swing.
These rally patterns were starting to form before the halving was announced and some thought it was a trap and one that was going to end up biting them. My observation is that the most informed traders are doing the same thing.
Smart traders may be making stops at the beginning of the rally, waiting for the price to drop after the event. Some are considering that the rally is a long-term bullish trend, but others are only concerned with making their profits.
Successful traders are anticipating that there will be a further rise in price, due to the large amount of money that will be put into the currency. It is also possible that the price of the currency could rise even higher, although that seems unlikely, as there has been an early profit taking for traders.
I have also seen a few traders who have started a short position, perhaps to limit the risk of a future swing. Shorting Bitcoins(BTC) gives the trader the opportunity to make a profit even while the price is still undervalued.