Halving History Suggests Bitcoin's Price Is Heading for $11,210

Bitcoin’s relative nascence makes its future price perhaps difficult to predict. There objectively is not as much data in the Bitcoin market as there is, say, in the gold market. Yet, there are numerous indicators which lend key insights into bitcoin’s price trends, and one often overlooked is the recurring halving.

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We’ve seen Bitcoin reach previous all-time highs several times, and in each case (but one) blow past it. As well, we’ve borne witness, and have some data, on two halvings. In 2012, one such halving preceded an all-time high.

A Glance at All-Time Highs

From July 2011 to February 25, 2013, Bitcoin users looked up to this number: $32. It was, back then, bitcoin’s all-time high. You can see that first bump in the Bitcoin USD all-time price chart just above the date “July ’11”:

After matching its all-time high on that aforementioned, fateful day in February 2013, Bitcoin peaked next on April 8, 2013, at $238.

That represents a 644% increase once Bitcoin’s July 2011 all-time high had been met. Bitcoin thereafter decreased in price, bottoming out around $69 in early July 2013.

In early November 2013, Bitcoin blew by the previous all-time high of $238. On November 29, 2013, one Bitcoin was worth $1,122 (a 371% increase) before a collapse in price and subsequent consolidation.

Fast-forward more than three years and many headlines later, and Bitcoin is trading at just over $900, six months after the second Bitcoin halving in July.

Lingham Predicts Continued Strong Support

As Civic CEO and Shark Tank South Africa shark Vinny Lingham predicted, and Bitcoin.com covered, Bitcoin cut right through the $800s.

Mr. Lingham plans to publish a blog post when the price of Bitcoin reaches $934. He relayed his short-term thoughts to Bitcoin.com in an email. “Now that we’ve broken $900, I think there should be an expectation of a consolidation at these levels, which will be healthy,” he said. “There may be a micro rally to $950-$975, but will most likely fall back to around $900. I think there is a lot of buying pressure in the 850-900 range which will support a $900+ position. Hard to say though….”

If Bitcoin reached its previous all-time high of $1,122, and then increased similarly to the previous time it surpassed an all-time high in April 2013 (371%), that would place Bitcoin at around $5,290 in the near-to-mid-term future.

What makes bitcoin price analysis more complex are the technical events programmed into the distributed network. One such major technical event – a Bitcoin block reward halving – took place in 2016. If 2012’s halving is to be used as a benchmark, the Bitcoin price could garner many headlines in 2017.

The Halvings

The two network halvings in bitcoin’s almost eight year history probably play more of a role in pricing than is continuously acknowledged in the financial analysis of the Bitcoin price.

In November 2012, the halving propelled interest, demand and disinflationary mechanisms; all which led to a continuation of the price increase, according to many Bitcoin participants.

Bitcoin’s major price gains the following year were well broadcast by mainstream media, with Bitcoin being featured on flagship television shows across the globe. The context of July 2016’s halving has likewise taken place amid attention-grabbing Bitcoin price increases. The correlation and/or causation between these two events are still subject to much speculation.

The halving in November 2012, when the price was $13, preceded the aforementioned $238 all-time high reached in early April 2013 by nearly six months. That’s a 1,731 percent increase from the halving to the next peak, a Bitcoin all-time high of approximately $1,122. The next halving took place on July 9, 2016.

On January 14, 2015, Bitcoin traded at $177, it’s nadir since the previous $1,122 high had been reached in late 2013. On the halving day 2016, the price of Bitcoin stood at $648. It had steadily climbed. Its topsy-turvy price formations had by-and-large helped people miss the newly awoken bull.

Since July, when the halving took place, Bitcoin’s price increases have only become more dramatic. Where this current price increase ends is anyone’s guess. 1,730 percent (the percentage price increase after halving 2012) of $648 comes to about $11,210.

Where Does That Land Bitcoin?

Where the Bitcoin price ends up, and when it ends up there, is the unknown variable here. Many experts suspect continued price increases. Barry Silbert notes people are not paying attention to the current price increase (though some take issue with this), and Tuur Demeester compared the recent price rise to the above-outlined winter 2013 price increase.

We’ve looked at price peaks after previous all-time highs had been reached and what the price did after halving 2012. There are many variables missing, but with the inputs we’ve used, the current price trend could land Bitcoin between approximately $5,290 and $11,860,00.

What do you think about Bitcoin, the halvings and all-time highs? Let us know your opinions in the comments below.

Images courtesy of Shutterstock and Blockchain.info.

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