The level of skepticism around the upcoming Bitcoin halvening continues to grow. In today's newsletter, Bloomberg predicted that the highly-anticipated miner reward cut could actually lead to the advent of a "big bear market" that will make even the most ferocious bulls take back their words.
Buy the rumor, sell the news
"Buy the rumor, sell the news" is a popular strategy in various financial markets. It is based on the premise that traders tend to sell an asset when a certain major event finally takes place but doesn't produce a significant impact on the price. Case in point: the launch of Bakkt's physically-settled futures. It is widely considered to be the main reason behind the massive Bitcoin price drop in late September.
Bloomberg predicts that the same scenario will take place on May 14, 2020, the "magical" day when the block reward will be reduced to 6.25 BTC. If the Bitcoin price fails to budge right after the halvening, this could lead to disillusionment for many crypto advocates.
"If a key bull plank is refuted, it's easy to see that leading to sadness and selling."
Bulls need more patience
Bitcoin's price history shows that its two previous halvings weren't immediately bullish. It took BTC four months to reach a new all-time high of $32 after its first reward cut that took place on Nov. 28, 2012.
The second halvening happened on July 9, 2020, and turned out to be short-term bearish. The price of BTC immediately plunged from $660 to $627, but it didn't stop to bleed there -- the crypto king plunged to the $460 level at the beginning of August.
It wasn't until October that bulls finally gained the upper hand and commended one of Bitcoin's biggest price rallies ever.
As reported by U.Today, trading vet Peter Brandt predicted that Bitcoin would bottom at $5,500 in July 2020.