Bitcoin price has slipped below the $9,000.00 psychological handle ahead of its halving event. As of this writing, BTCUSD is trading around $8,722.50 after peaking at $10,074.00 last week. Could this be our last chance to go long before the cryptocurrency rallies or is this a sign that bitcoin price is still headed lower?
A Bullish Bias on BTCUSD
Bitcoin’s halving happens roughly every four years or when 210,000 blocks of the cryptocurrency are produced. The aim of the event is to regulate the number of cryptocurrency available in the market by reducing the amount of bitcoins produced every 10 minutes from 12.5 to 6.25. If demand is sustained, we could see bitcoin price rally.
On the daily chart, it can be seen that the cryptocurrency is already testing support at the rising trendline (from connecting the lows of March 13, April 16, and April 21). The area around $8,200.00 also coincides with the 100 SMA and 200 SMA. Additionally, this price also coincides with the 50% Fib level when drawing the Fibonacci retracement tool from the low of April 16 to the high of May 7. Reversal candles around this level could indicate that BTCUSD is on its way to $10,466.00 where it peaked on February 13. If there are enough buyers in the market, we may even see it rally to its August 2019 highs around $12,060.00.
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A Bearish Argument for Bitcoin
However, nothing is set in stone yet. If demand wanes following the halving event, bitcoin price could drop. The 4-hour time frame, BTCUSD looks to have formed a bearish flag. A close below the low of May 10 at $8,109.00 would constitute a downside break. It could then mean that the cryptocurrency is headed to its April 21 lows at $8,780.55.
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