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Bitcoin prices might be a long way off their 2019 high of almost $14,000 but this year has still seen the cryptocurrency gain in price. The year opened with the leading digital asset trading at just below $3,800, considerably less than its current price of around $7,300.

Although yearly price data is clearly limited, if previous years are anything to go by Bitcoin looks set to post two more years of gains. There seems a pattern emerging that sees a year of decline follow three years of upside.

Despite the admittedly meagre sample size (Bitcoin has only been around for a decade, after all), the price of the leading cryptocurrency by market capitalisation looks poised to post two more years of upside. Bitcoin price, when viewed as a yearly candlestick chart, appears to be repeating a pattern of three years of upside followed by a year of losses. Given that Bitcoin is such a young asset, there have only been two of these four year cycles to observe so far. That said, the first candle of the third looks to be falling in with the pattern with just over four weeks left in the year. Providing the price stays above $3,800, the pattern will remain intact.

Along with the general pattern of three up, one down, there is another interesting, potentially emerging trend. The last candle of the back-to-back price increases is typically much larger than the two prior. If the pattern holds true, it looks like 2021 will see explosive growth for the digital asset.

The oversized candlesticks every four years are likely partly the result of the halving event programmed into Bitcoins code. Every four years, the supply of new coins gifted to miners for adding a block of transactions to the blockchain decreases by half. This essentially increases Bitcoins stock-to-flow ratio (a measure of scarcity) and any uptick in demand has a much more magnified impact on prices than a similar increase would have done prior to the halving.

The next halving event is expected to occur during May of 2020. This will see the number of new Bitcoin added to the total circulating supply every ten minutes fall to 6.125.

Some traders and market analysts believe that the next halving will result in another parabolic run up in Bitcoin prices, like those seen in 2017 and 2013. PlanB (@100trillionUSD) argues that the reduction of new Bitcoin regularly hitting the market will eventually see the price rise to around $55,000 per Bitcoin. The analyst makes no prediction as to when this will occur. However, given that the stock-to-flow theory of Bitcoins value centres around the halving events every four years, if PlanBs prediction comes true, we will see a $55,000 Bitcoin at some point within the four years following May 2020.

Related Reading: Bitcoin Falls 20% Below Stock-To-Flow Forecast

More:
Two Years of Upside? Bitcoin Yearly Candles Hint Explosive Price Growth Incoming - newsBTC

For those standing very close to the crypto charts, it might be easy to get discouraged by the gloomy nature of recent markets. However, new comparisons of the current halving cycle to those in the past have emerged and might put some wind back into the sails of traders, hodlers, and cryptocurrency enthusiasts in general.

Also Read: As Halving Interest Grows, Spectators Discuss Miner Hoards and Capitulation

Though crypto prices took a big dip in November, with BTC falling 30% from a high of $9,486 to a bottom of around $6,575, hash rates on both the BTC and BCH chains have held relatively steady as the next block reward halving approaches. Data also points to miners hoarding coins in view of the upcoming subsidy reduction, as the event is generally viewed as price favorable. In combination with these factors, new analysis has emerged which might suggest that in spite of the recent bearish climate, things might be more on track than previously supposed.

The image above aligns the block reward halving points of three cycles (the latter half of pre-halving and the first half of post-halving), with the three cycles anchored at a common line of 100% of the cycle low. The first two cycles which are completed, and the pre-halving phase of the current cycle are displayed. Interestingly, the movements in the latter half cycles appear to follow a similar trend. As creator of the graphic, @Chartsbtc, states on their Twitter post:

Each cycle is 210,000 blocks (~4 years). This chart starts half way through the cycle and goes half way into the next cycle. This is my attempt to show the lows prior to halving and the peaks post halving but keep everything centered around the halving.

The graphic is compelling, and has many hoping for great moves price-wise in 2020 and beyond. Discussing the methodology of creating the graphic further, @Chartsbtc explains why the green price action line does not touch the 100% cycle low level: The low was a intraday price and the chart only plots the closing prices to the nearest 105th block. I wish I actually had prices per block. They further note that viewers should Keep in mind that each cycle peak will likely be lower than the prior one. Even so, should the trend repeat BTC could see a post-halving peak around $80,000. Still, this is all speculation, and other factors must be kept in mind.

With the Bitcoin Core halving estimated to be taking place in mid-May, 2020, and the Bitcoin Cash halving to likely occur a month earlier, speculation of course abounds. Other factors playing into market perception and possibly price, such as proliferating development surrounding the BCH chain, and a trend of businesses dropping BTC as a payment method due to fees and congestion (not to mention an overall shift in attitude in the BTC community from user to mere hodler), could also have unexpected affects. If the projections of the above halving data are correct, however, everyone may be in for an interesting ride in 2020.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Images courtesy of Shutterstock, fair use.

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Graham Smith is an American expat living in Japan, and the founder of Voluntary Japanan initiative dedicated to spreading the philosophies of unschooling, individual self-ownership, and economic freedom in the land of the rising sun.

See more here:
How the Upcoming Bitcoin Halving Compares to Previous Cycles - Bitcoin News

Updated: May 25, 2018:

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How Did Bitcoins Price Fare Yesterday?

Bitcoins price at the moment is clocking in at $7,420.53, which means that since yesterday, it is down about 4.53%. This is the 2nd consecutive day that Bitcoin has moved down, but the coins trend over the past two weeks is unclear. Since it is somewhat close below relative to its 20-day average price of $7,885.087, a climb up to the 20-day moving average may be needed before momentum buyers come in. Alternatively, for those interested in trading ranges that Bitcoin bounces between, its current two-week trading range in US dollars is between $6,824.22 and $8,945.95. Its market capitalization currently is estimated to be around $130.96 billion US dollars, while its market dominance (percent of total crypto market) is estimated to be 66.31%. It should be noted, though, that Bitcoins dominance has been gradually moving up, reporting an average daily rise of 0.09% over the past 14 days. A rise in dominance may suggest cryptocurrency activity is consolidating on the Bitcoin blockchain, and that Bitcoins chances for long-term survival are thus enhanced.

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274,621 transactions were recorded on the Bitcoin blockchain yesterday. Daily transactions recorded on the Bitcoin blockchain fallen by approximately 3.25% this past week, though it should be noted the trend is not clear at this time. Bitcoin may end up functioning as a store of wealth if it does not increase the number of daily transactions occurring on its chain. Yesterday, Bitcoins average fee per transaction came in at $0.75. The size of the typical transaction on Bitcoins blockchain is down 5% in US dollars; meanwhile, the fee for sending transactions has been declining by 4.5% per week. Bitcoins transaction fee and average transaction value are both declining, though that is likely to change if Bitcoins price sustains a stronger rally going forward. In terms of how much computing power Bitcoin is using, over the past 30 days its hash rate has continued to bounce around, ultimately falling daily by approximately -0.14%. Ultimately, the security of Bitcoin is being something to keep an eye on, because the hash rate trend is unclear which implies the trend in mining strength is now more uncertain in a way. This may not help Bitcoin attract more high-value transactions.

Article by SixJupiter

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Bitcoin Drops 4.53%, But Downtrend Has Cooled and Dominance is Now Heading Up | Coin Insider - Coin Insider