At the moment of writing this article, Bitcoin is trading in the red, and the most important coin in the crypto market is priced above $7,300.
Crypto mining operation Blockware Solutions came up with some pretty interesting details of what could happen as the halving gets closer.
Bitcoin predictions ahead of the halving
As you know by now, the halving is scheduled to occur in May, and this will slice in half the BTC reward that miners can earn for processing transactions.
The impact that the halving process will have on Bitcoin and crypto has been debated for months by crypto analysts, and there have been optimistic but also some gloomy predictions about it.
According to a report, the halving will probably trigger a “shakeout before the breakout”.
According to the online publication the Daily Hodl, the shakeout phase could see massive capitulation of the BTC miners who will not be able to pay their bills – these are expected to sell their BTC and switch off rigs.
This will reportedly land the price of the king crypto to around $5,000.
After all the inefficient miners have capitulated, the company said that there’s an important amount of the selling pressure from miners that will be removed.
Strong miners will remain, the ones who do not need to offload their BTC.
Making sure that BTC hits a bottom
Blockware Solutions also analyzed Bitcoin’s built-in difficulty adjustment – this reviews network activity and is also adjusting the amount of computing power required to process transactions.
This is a crucial element that’s expected to keep miners in the green and make sure that BTC hits a bottom.
“After miners have shut off (capitulated), newly mined Bitcoin is allocated to the most efficient miners, which minimizes sell pressure on the Bitcoin market as these miners are well above their breakeven prices…” according to the report mentioned by the Daily Hodl.
We suggest that you check out the complete report in order to learn all the details.