Complicated Demand and Supply Outlooks

According to his chart, there is a strong probability that the diagonal resistance and diagonal support for Bitcoin will be converging in May 2020. Support and resistance are two very important aspects of any financial market, especially when it comes to CFDs and Forex trading. These levels are essentially defined by market participants, and they define supply and demand, both of which can shift quickly.

Support occurs when there’s an expectation of a downtrend pausing, likely due to a concentration in demand. Resistance, on the other hand, occurs when an uptrend is expected to pause due to a concentration of supply temporarily.

As Kling explains, the diagonal resistance and support will be converging in May- the same time that the Bitcoin halving is expected to happen. It is expected that the selling pressure will also ease due to the halving. Miners should be dumping about $7.2 million worth of Bitcoin into the market, as opposed to $14.4 million per day. This huge difference is supply is set to drive demand up, thus raising the price of the asset significantly as well.

Kling is the latest market analyst to be betting big on the halving to drive Bitcoin to even greater heights in 2020 and beyond. Several market insiders have made similar bets, with companies- especially those in the mining space- even restructuring their processes and operations to position themselves to gain as much as they can when the block rewards are finally cut in half.

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