Is BTC still on course to see an over $20K rally this year?
Importantly, one widely respected economic indicator is showing that Bitcoin is still on track to see a notable parabolic rally in the days and weeks ahead, which could lead the crypto to rally as high above $20,000.
“Some thoughts here on BTC. We moved -27% since the top. We arrived at a cluster of daily, weekly and monthly support levels, after losing POC. The reactions, if they are bullish, are often strong and quick.”
It is important to keep in mind that despite the ongoing selloff, Bitcoin is still on track to see notable gains according to its “stock-to-flow” model that has been popularized by prominent Bitcoin analyst PlanB.
He explained in a recent tweet that BTC is still on course to follow the course this model sets forth, which could mean it will soon see an over $20K rally to fresh all-time highs, with this rally coming about alongside the crypto’s upcoming mining rewards halving.
“Bitcoin S2F chart adjusted for today’s ‘crash’ … nothing really happened, BTC still spot on S2F track.”
Unless BTC sees significantly further downside going into its upcoming halving event, it is a strong possibility that it still has further room to grow in the weeks and months ahead.
May 2020 Mining Reward Halving
Bitcoin is set to undergo its third mining-reward halving sometime in May 2020. As the name suggests, the rewards per block mined will be halved from current 12.5 BTC to 6.25 BTC. The process is repeated every four years and is aimed at curbing inflation in the cryptocurrency.
Conventional wisdom, at least among bitcoin analysts, holds that the reward halving could create supply deficit and put bitcoin on the path to new lifetime highs above $20,000.
“In approximately 200 days (69 days until the halving) buying [one] bitcoin will be out of the reach of 99.8 percent of the population of the earth,” Jason Williams, co-founder and partner at Morgan Creek Digital tweeted on Sunday.
Historical data show the cryptocurrency rallied sharply in the years following the previous halvings, which took place in 2012 and 2016.
While halving may repeat history by rallying in 2021, the options market indicates a low probability of a big move higher this year.