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Pre-halving rally will be short-lived, experts believe.
BTC/USD may drop to $6,000 before the growth is resumed.
While Bitcoin takes one major resistance after another, Michael van de Poppe, a full-time day/swing trader in cryptocurrencies based at the Amsterdam Stock Exchange, believes that it is not the time for the bulls to rest on their laurels. Recently he published a new forecast that implies a sharp Bitcoin correction after this cryptocurrency's halving. He says that the market will play out a 'buy the rumor, sell the news' scenario, which will lead to Bitcoin's sell-off.
This is my main scenario for $BTC, still. Halving; 'buy the rumor, sell the news' event with a selloff to occur. After that correction, the bull market can start.
He identified $5,900 as the correction target that will stop the sell-off and trigger another bullish wave.
Meanwhile, Craig Erlam, Senior Market Analyst at Oanda, also warns that the current bullish momentum is a result of speculators'activity, while the halving may come as a disappointment as it is already priced in.
The Bitcoin halving in under two weeks may explain some of the bullish activity by speculators. But you have to think that an event that has been in the diary for so long will already be priced in. This could see some of these moves faded as we hit halving day.
This view is mostly shared by Christel Quek, Chief Commercial Officer and Co-Founder at Bolt Global. Speaking in a recent interview with Bloomberg, he explained that BTC price may drop after the halving as investors might consider taking a profit.
This is an unprecedented time as liquidity remains a priority for investors fleeing equity markets. Therefore, while Bitcoin should rise into $10,000s after the halving, it could be followed with a price drop as investors engage in profit-taking. No level of technical support can stand when the economy is drained.
At the time of writing, BTC/USD is changing hands at $8,850, with over 10% of day-to-day gains. The first digital coin has increased by 42% in the recent month and gained over 75% in 12 months.