So it finally happened! We hit block number 630,000 and with that, the Block Halving occurred. This means that miners are now receiving just 6.25 BTC per block, down from the previous 12.5 BTC per block that they were previously getting.
So the overarching question is; What Now?
Well, we can most certainly expect a whole lot of volatility over the next few days and weeks. Just because the block halving occurred, do not expect the price for the cryptocurrency to explode and head toward $20,000 instantly.
Instead, we are likely to see BTC heading down and then up in a whipsaw like fashion until a sustainable equilibrium is reached between miners’ costs and miners’ revenue.
Let me present the bullish and the bearish case for Bitcoin over these next few weeks.
Bitcoin Price Analysis
BTC/USD – Daily CHART – SHORT TERM
Taking a look at the daily chart above, we can see that not much has moved since the halving, we are still trading at the $8,600 range and remain supported by a short term .236 Fibonacci Retracement level. This $8,600 will be a critical level to keep your eyes on for the next 24 hours.
So the bullish case would be that BTC rebounds from the current $8,600 support and starts to climb higher. In this case, the first level of strong resistance will be located at $9,090 (bearish .786 Fib Retracement). Above this, resistance lies at $9,300, $9,600, $9,750 (bearish .886 Fib Retracement), and $10,000.
Beyond $10,000 resistance is found at $10,247 and then 2020 high at around $10,457. If we can breach this resistance, BTC will certainly be headed toward the $15,000 level and possibly toward $20,000 by the end of the year.
In the bearish case, we would first need to see BTC breaking the current support at $8,600. However, even if we break beneath this we still won’t be in a bearish trend. To turn fully bearish, the market would have to fall beneath $8,000 and break beneath the support at the 100-days EMA at $7,900 and penetrate beneath the green rising trend line.
If this occurs, we can expect support at $7,700 (.382 Fib Retracement), $7,500, $7,000 (.5 Fib Retracement), and $6,500.
Despite these two outlined cases, we are most likely to just whipsaw between $10,000 and $7,000 over the following weeks. A break beyond these two levels would dictate where we will be headed toward over the next few months.
Support: $8,600, $8,500, $8,200, $8,000, $7,690, $7,500.
Resistance: $9,000, $9,200, $9,600, $9,800, $10,000.