Bitcoin has been facing tremendous turbulence over the past several weeks, with its price incurring an explosive rally before retracing to erase the majority of the gains that this bullish movement had brought about.
One long-term event that has been widely seen as being fundamentally bullish is right around the corner, but one prominent analyst is warning that it may not catalyze a rally as is widely anticipated.
Willy Woo: Bitcoin Halving Not Shaping Up to Be a Bullish Event
Bitcoin’s mining rewards halving, which is set to occur this coming May, has long been viewed as an impetus for major bullishness, which partially stems from the fact that historical data supports this notion.
This year, however, Bitcoin is not expressing the bullish signs that it usually does in the time just prior to these events, which could mean that it will be gravely disappointing and possibly spark another major bout of capitulation.
Willy Woo, a prominent cryptocurrency analyst, spoke about this in a recent tweet, explaining that BTC has never gone into a mining rewards halving with bearish price action, which could mean that the event will actually prove to be bearish catalyst that extends the ongoing bear market that Bitcoin has been caught in since late-2017.
“NEVER gone into a halvening in BEARISH price action, miners already capitulating adding sell volume. Historically we front run with a BULLISH setup, miner capitulating only after halvening when revenues are slashed. This is a unique setup. Quite bearish leading up to the event,” he noted.
Woo further went on to explain that as Bitcoin’s price decreases, smaller mining operations shut down due to it being unprofitable, but the latest bout of miner capitulation comes as BTC is still trading significantly off of its lows of $3,400, which he sees as another bearish sign.
“Well this time around, we have gone $14k->$7.5k and that’s killing off weak miners who are dumping and dying. This adds to the already bearish action, so no happy front running 6-momnths out due to sell pressure. You can’t draw repeat fractals, the fundamentals are different,” he explained.
If Bitcoin is unable to incur any sustainable upwards momentum in the coming weeks and months, Woo may be proven right and the upcoming halving may result in anomalous bearish price action.