Bitcoin has positioned itself back in the control of bearish traders after being rejected from the $7,000 level of resistance for the third time in as many days.
After tapping $6,980 Bitcoin proceeded to fall dramatically, sliding all the way down to $6,460 before floating back to the $6,650 level.
It’s worth noting that $7,000 has been a historical level of support and resistance dating back to the 2018 bear market, with it also providing support throughout November and December.
A breakout above this level would undoubtedly be violent with several analysts suggesting that a move back into the $8,000 region leading up to May’s halving event could be on the cards.
The Bitcoin halving has been covered extensively by Coin Rivet in the past. It is an event that sees block rewards for miners halved from 12.5BTC per block to 6.25BTC per block, which theoretically reduces supply going onto the market.
The two previous halvings have led to a series of bull markets that saw Bitcoin eclipse its previous all-time high, with the latest coming in 2017 when Bitcoin surged to $20,000.
That is why, despite uncertainty surrounding coronavirus, Bitcoin traders are seemingly more bullish than ever from a medium to macro timeframe perspective.
However, a news event as impactful as Coronavirus has the potential to invalidate all theories and predictions as it truly takes control of capital markets.
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In August 2008, the domain name bitcoin.org was registered. On 31st October 2008, a paper was published called “Bitcoin: A Peer-to-Peer Electronic Cash System”. This was authored by Satoshi Nakamoto, the inventor of Bitcoin. To date, no one knows who this person, or people, are.
The paper outlined a method of using a P2P network for electronic transactions without “relying on trust”. On January 3 2009, the Bitcoin network came into existence. Nakamoto mined block number “0” (or the “genesis block”), which had a reward of 50 Bitcoins.
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice.