For the first time since last spring, Bitcoin stabilizes just below 5300 USD. However, despite the price slightly lowering, this might not be the end to the sudden bullrush started on March 11. In fact, the market appears to be gathering forces before continuing the onslaught.
However, not a lot of people understand the reasoning behind the sudden price increase. And there are two reasons for it.
Bitcoin Halving Event
Blockchain depends on its miners to process transactions — and in exchange for that, pays them with Bitcoin. However, the amount of the reward is not fixed — each couple of years it’s slashed in half to compensate for the growth in calculation power and create an alternative to inflation.
Halving events are usually preceded by the growth of the Bitcoin value, and it seems like 2020 won’t be an exception. Essentially, Bitcoin is about to become twice as hard to get — and twice as valuable.
Of course, it’s hard to say how the coin will hold up AFTER the event. The pessimistic forecast is stagnation, but there are other factors that may keep the market bullish.
No asset market is truly chaotic — or, at least, it should not be. There are rules on it that can help you predict the future turn of events.
Bitcoin itself has been in the red since the beginning of 2018, losing the investors left and right. By March, the majority of holders were the core supporters who will not sell until they have a good reason to. The coin reached its lowest possible value around 3 000 USD, but felt rather comfortable there and even attempted a half-hearted recovery. In fact, some indicators have even started to turn positive.
Now that we have a corresponding bullrush caused by real-world events, positive technicals actually come into play full-force. They alone won’t be enough to keep the market bullish after the Bitcoin halving event, but they can definitely prevent a sharp dropoff.
Increased Market Activity
The interest in crypto has surged again, now that the market is turning bullish once more. Since early March, the market has grown by more than a quarter and now has 350 000 transactions per day on average. And, most importantly, it keeps growing.
There is a possibility that this is just redistribution of coins between different existing users. However, it is more likely, that we are seeing another influx of newcomers to the market, which means that this interest might be retained for a while. And the increase in users, generally, means that the market will stay bullish.
Nobody knows what happens to Bitcoin next, but so far the vision is largely positive. Good technical factors, the increased value after the halving and an increase in the market activity are bound to keep the market bullish for a while. Not to mention that some other interesting news is might be around the corner — particularly, whatever Vitalik Buterin has been cooking for the last year.
Either way, increased market activity makes cryptocurrency a valuable trading asset. And while the market is not as safe to trade on, as it was a couple of months ago, the possible profits have also grown significantly.
What is the Best Way to Trade Bitcoin
There are quite a lot of ways to buy and sell crypto, but most of them aren’t really suited for professional trading. You can use online exchanges, like Coinbase, but they come with their own disadvantages — you need to be a citizen of a certain country to withdraw money, for example.
However, there is another way to make money on Bitcoin price movements — CFD trading. CFD stands for a “Contract for Difference” and represents an agreement between a broker and a trader. Essentially, they allow you to make money cryptocurrency without bothering with setting up Blockchain. The best way to trade Bitcoin with CFDs is JustForex cryptocurrency account. With JustForex you get intraday trading, expert advisors, excellent support and education systems, and the best trading instrument available.