In today’s Asian trading session, Bitcoin was navigating a rather narrow trading range, as it tries to lean on 55 D EMA for support. Just earlier this month, Bitcoin climbed up to 31,011, staging a comeback from last year’s low of 15,452. Yet, the momentum has since waned, as it turned into a pullback. While the overall momentum of bitcoin isn’t too convincing, there are market whispers about the start of a new “super cycle.”
This super cycle conjecture is rooted in the anticipation of the “halving” event, which is predicted to take place around April 2024. The total supply of Bitcoin is capped at 21 million (hardcoded into the protocol by creator Satoshi Nakamoto). The halving event cuts the rate at which new bitcoins emerge and are awarded to miners, approximately every four years or after 210,000 blocks have been mined.
When Bitcoin was first launched in 2009, the block reward was 50 bitcoins. In 2012, the first halving transpired, slashing the reward to 25 bitcoins. Fast forward to 2016, and the reward was reduced once more, this time to 12.5 bitcoins. The latest halving took place in May 2020, leaving the current block reward at a modest 6.25 bitcoins.
Historically, Bitcoin has experienced significant price movements following halving events. In each cycle, the cryptocurrency’s price bottomed out around 12-18 months before the halving, followed by a new record high in the subsequent months.
From a technical perspective, near term outlook of Bitcoin will remain bullish as long as 25242 resistance turned support holds, even in case of deeper pull back. Break of 31011 will resume the rebound from 15452 to 38.2% retracement of 68986 to 15452 at 35902. This is the key hurdle for Bitcoin to overcome if it’s really developing into a “super cycle” up trend.
Meanwhile, decisive break 25242 support will argue that Bitcoin is vulnerable to hit another low below 15452 before building the base for the so-called “super cycle”.
