Ahead of its anticipated halving event, bitcoin price is stalling at the $9,000.00 psychological handle. Since April 30, BTCUSD has been stuck at this price. Will we see a breakout happen soon?
What is Bitcoin Halving?
A halving event happens roughly every four years or when 210,000 blocks or 21 million bitcoins are generated. It is a move which aims to limit the number of cryptocurrency available. Some analysts think it will happen this May, with a few forecasting the date being May 12. What will happen is the number of bitcoins in circulation will drop by half from 12.5 to 6.25 every 10 minutes. Consequently, the supply of bitcoins will decrease. If demand stays the same, the event would be bullish for bitcoin price, in theory.
Should this turn out to be the case, bitcoin price could break to the upside of its bullish pennant. On the 4-hour time frame, it can be seen that BTCUSD has been making lower highs and higher lows after a sharp rally. A close above the high of May 3 at $9,207.82 could mean that the cryptocurrency is headed to its February 11 highs at $10,425.96.
On the other hand, if demand falters following bitcoin halving, BTCUSD could fall. Resistance at the falling trend line on the daily time frame could hold. A bearish close below the low of May 4 at $8,528.42 would invalidate the bullish pennant chart pattern. Instead it could mean that BTCUSD is headed to $8,053.19 where the 100 SMA and 200 SMA coincide.