History has not repeated itself! After the third halving, Bitcoin did not rise but fell, what are the three reasons behind it?

At 7:45 on May 12, Beijing time, Bitcoin completed its third “halving” since it was born at a block height of 630,000. After the last two “halving” bitcoin prices have skyrocketed, but this time began to decline before the “halving”, after the “halving” is completed, it fell by nearly 500 US dollars in a short-term. Many investors have fully expected the price increase of bitcoin caused by the “halving” event. The slowdown of the epidemic crisis suppressed the bitcoin hedging function and the conspiracy theory may be the reason for the unexpected rise of bitcoin. .


Bitcoin halved for the third time, prices fell slightly

Bitcoin’s previous two halvings occurred in November 2012 and July 2016, respectively, when the Bitcoin block rewards dropped from 50 to 25, and from 25 to 12.5. This halving will drop to 6.25 bitcoins.

The data shows that the price of bitcoin reached $ 8541 when it was halved, and the current amount of bitcoin to be mined is only about 2.62 million.

What does halving mean? In cryptocurrencies, mining is used to record and verify information in Crypto records called blocks. Each time a mathematical puzzle is solved, a new block is created and added to the blockchain, and the new cryptocurrency reward will be handed over to the computer that solves the mathematical puzzle after the blockchain network confirms it. The Bitcoin main chain network will generate a new block approximately every 10 minutes. In the first four years of Bitcoin, the reward for generating new blocks every 10 minutes was 50 Bitcoins. It is halved for every 210,000 blocks mined, and its period is four years, which is called halving. In fact, mining rewards are just a way for Bitcoin to balance the risk of inflation and distribute new coins.

On the eve of the halving, Bitcoin staged a flash crash. After the last two halvings, the bitcoin price increased by 81 times and 30 times in the following 18 months. But this time, the “halving” has not yet arrived, and the bitcoin price has started to “deflate”, staged a “waterfall market” that plummets. In the past 2 months, bitcoin has skyrocketed 160% in a row, and on May 8 it regained a high of $ 10,000. However, as the Bitcoin reward halving time node approached, on May 10, Bitcoin once plunged $ 1,400, falling 14% in a straight line within half an hour. More than 40,000 people broke the position for a total of 6 billion U.S. dollars on the day .

According to media reports, the Bitcoin plunge on May 10 was the fastest decline in the crypto market in months. The pressure is so great that the website of the cryptocurrency exchange Coinbase has also “collapsed”.

In the 24 hours before the third halving of Bitcoin, the price of Bitcoin has been showing a sharp fluctuation. After the third halving was completed, the trading platform Bitfinex quoted that bitcoin fell short of nearly $ 500 in the short term, and fell more than 3% within the day, refreshing its low since April 29 to $ 8366 / piece.

Bitcoin has not skyrocketed after this halving, there may be three reasons behind it

After the first two “halvings”, Bitcoin opened a bull market, which once surged. But this time, the “halving” has not yet arrived, and the bitcoin price has started to “deflate”. Why?

On November 28, 2012, Bitcoin completed its first halving, when the price reached 12.4 US dollars, and on November 30 the following year, Bitcoin rose to 1,175 US dollars, an increase of up to 9375%. On July 10, 2016, Bitcoin completed its second halving, the price reached 652.29 US dollars. As of December 17, 2017, the price of Bitcoin exceeded 20,000 US dollars, setting a record high in history, and the increase was almost 3000%. However, it should be noted that although the price of Bitcoin has risen sharply after the first two rounds of halving, its upward trend has failed to continue to charge at the high point. For example, after reaching a peak of $ 20,000, Bitcoin’s price began to fall and fell to around $ 4,000 in December 2018.

After the first two halvings brought about skyrocketing, many investors have already fully expected the bitcoin price increase caused by the halving event, which may be an important factor in the decline after the third halving. Many investors started to open positions before. According to CoinTelegraph, CME Group has recently set a record high for open positions. The spot exchange has shown the highest level in 2017 in the past three weeks. On May 3, 2020, the latest difficulty adjustment data of Bitcoin was announced, and the computing power of the entire Bitcoin network rose sharply, exceeding 120EH / s. Before the advent of the third halving, bitcoin has seen a gain of nearly 160% in two months. Such a sharp rise before the halving did not appear in the first two. For investors in the previous period, the halving was officially implemented when it was in favor of the expected fulfillment, and it could be sold if the previous increase was sufficient.

To put it simply, although many people are caught off guard by the sudden plunge of Bitcoin, it may be unexpected. In reason, there may be three reasons behind it:

①In fact, Bitcoin’s previous surge has over-drawn some market potential. Before the advent of the third halving, Bitcoin has seen a gain of nearly 160% in two months, which did not appear in the previous two. A premature surge will inevitably lead to an imbalance between supply and demand, which is a precursor to a sharp decline.

②Currently, Bitcoin has become a safe-haven asset. Recently, economic fluctuations in various countries around the world have begun to weaken. The black swan caused by the spread of the epidemic in the world is expected to be digested by the market, so the fall of safe-haven assets has become reasonable.

③Slightly conspiracy theory. If this statement is reliable, then there are reasons for Bitcoin’s rapid rise and fall. Before the halving of bitcoin, the market maker suppressed the market price on a large scale, absorbed bargain hunting to obtain more chips, and finally used the halving to capture higher profits, then the current sharp rises and falls are very easy to understand.


(Bitcoin price daily chart)

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