Analyses

The Third Bitcoin Halving to Take Place in Less Than 12 Hours – BTC, ETH, LTC Price Analysis, 11 May, 2020

With the third Bitcoin halving taking place in less than 12 hours, the volatility in the crypto market has increased solidly. The price of Bitcoin recorded a sharp price decline during the weekend – BTC/EUR dropped from the psychological level of €9,000 to approximately €8,000. 

However, the price decline didn't scare the cryptocurrency enthusiasts and some of them even think that it is the right time to buy Bitcoin at a good price. For example, yesterday, well-known cryptographer and CEO at Blockstream.com Adam Back wrote in Twitter "Buy the dip":

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Source: Twitter

It is worth mentioning that miners are also not afraid of the upcoming Bitcoin halving and potential price volatility. According to Forbes, Riot Blockchain, a public cryptocurrency mining company listed on Nasdaq, announced the purchase of 1,040 next-generation Bitmain S19 (95 TH) Antminers for $1.9 million from BitmainTech. The main idea of Riot Blockchain is to increase its hash-rate capacity by over 80% in the third quarter of 2020.

The price decline that started during the weekend continues into early Monday. At the time of writing, according to Coin360.com, one Bitcoin costs €7,989.32 (-1.67%), one Ethereum – €172.26 (-2.16%), and one Litecoin – €38.06 (-3.42%):

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Daily crypto market performance. Source: Coin360.com

Now let's check the price charts of the major cryptocurrencies against the euro.

BTC/EUR

In the one-week time frame (1W), last week BTC/EUR formed a «Doji»:

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The Doji is an important candlestick formation, signifying equality and/or indecision between bulls and bears. Hence, in the price chart of Bitcoin, there is a signal that the market is taking a break before the upcoming Bitcoin halving.

However, in the one-day (1D) time frame, BTC/EUR is still within an «ascending channel»:

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The above chart shows that despite the solid price decline that happened during the weekend, BTC/EUR has remained in the ascending channel.

The upcoming Bitcoin halving will probably determine if the uptrend resumes or if it breaks.

ETH/EUR

In the 1-week chart (1W) of ETH/EUR, the sequence of bullish candlesticks was interrupted by a «Bearish Engulfing»:

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Theoretically, a «Bearish Engulfing» formation is a technical chart pattern that signals lower prices to come or trend reversal. 

However, we think that because of the high correlation between the prices of the major cryptocurrencies, ETH/EUR will follow the price dynamics of BTC/EUR at least in the next few weeks. Therefore, we consider the upcoming Bitcoin halving to be a key determinant for the further price movement of Ethereum as well and we will not focus solely on the «Bearish Engulfing» formation.

LTC/EUR

In the 1-day time frame (1D), because of the recent price decline in the crypto market, LTC/EUR has dropped bellowed the 30-day Moving Average (MA 30):

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The Technical Analysis theory suggests that a drop below the 30-day Moving Average is a clear bearish signal.

Nevertheless, it is better to wait for the Bitcoin halving to take place, because it may change the global sentiment in the cryptocurrency market and impact the price direction of Litecoin as well.

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The analysis is purely informational and does not constitute investment, financial, trading, or any other sort of advice and you should not treat any of Bitvalex's content as such. Bitvalex does not recommend that any cryptocurrency should be bought, sold, or held by you. You are solely responsible to conduct your own due diligence and consult an advisor before making any investment decisions.


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