Bitcoin Retraces From $9,400 Just 11 Days Before Its Halving Event

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Bitcoin (BTC) surprised many investors in the cryptocurrency market when it was able to surpass $9,400 and then come back to the $8,800 level. Indeed, Bitcoin moved 22% in less than 24 hours allowing it to attract the interest of investors and enthusiasts that were on the sidelines. 

Bitcoin’s Halving Pushes Demand

Bitcoin is getting close to a new halving event. This is expected to be bullish for Bitcoin in the mid- and long-term. In just 11 days, on May 12, the Bitcoin network is going to be experiencing a new halving event that would reduce rewards from 12.5 BTC to 6.25 BTC per block. 

That means that miners will have fewer BTC to sell to the market and to cover their expenses. Although this could reduce the number of miners on the Bitcoin network, it could also push BTC prices higher. 

With a lower number of BTC being created and increased demand for the asset, the number of BTC available to meet the growing demand would create a good environment for BTC price to grow. If we follow the trend of previous halving events, Bitcoin could surpass its previous all-time high in the coming years or even months. 

With yesterday’s price increase, the entire cryptocurrency market moved higher. Ethereum (ETH), XRP and Litecoin (LTC), which represent a large part of the crypto market, experienced moderated gains as well. If Bitcoin grows, it generally pushes other digital assets higher. 

In the chart above, we can see how Bitcoin price moved towards its local high on April 30. At the same time, as the price of BTC reached a top and it started falling, the 1 hours MACD showed a change in the trend with a selling signal being triggered. 

The debasement of Fiat Currencies

It is worth mentioning that in a recent document released by Grayscale, they inform that the unlimited fiat money supply risks “debasement” of the U.S. dollar. Due to the Coronavirus crisis that started in early 2020, many countries decided to print money in order to increase liquidity in the economy. 

Grayscale informs in the report that the high levels of debt and fears of default are driving “the most aggressive monetary policies since Bitcoin’s creation.” 

On the matter, they commented:

“Fiat currencies are at risk of debasement, government bonds reflect low or negative real yields, and delivery issues highlight gold’s antiquated role as a safe haven. There are limited options to hedge in an environment characterized by uncertainty.”

Via: 2Usethebitcoin.com

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