Bitcoin's (BTC) Difficulty Adjustments Mirror Previous Halving Cycle

News
Sat, 01/25/2020 - 18:05
Alex Dovbnya
Bitcoin's difficulty continues to rise at same pace as in 2016 when the previous halving took place
Cover image via www.123rf.com
Contents

Bitcoin's difficulty adjustments continue to perfectly track the 2016 halving, according to a chart posted by Stock-to-Flow model creator PlanB. Hence, there is strong reason to believe that there will no much-feared miner capitulation.  

image by @100trillionUSD 

No miner capitulation 

As reported by U.Today, the Bitcoin mining difficulty reached a new high of 14.78 trln on Jan. 15, 2020, after more powerful miners joined the Bitcoin network. This flew in the face of those who expected miners to call it quits in December when BTC's price action went south in late 2014.

On Nov. 15, the difficulty plunged by seven percent but Bitcoin's hashrate, which gauges of the power of the entire Bitcoin network, never followed suit. As predicted by PlanB, the drop was followed by a positive difficulty adjustment, which was bullish for Bitcoin.

In his new tweet, the Dutch analyst points to the fact that both the network continued to grow 100-fold before and after the two previous halvings without any capitulation, which is likely to the case after another supply cut in May 2020. 

On track to $50,000 (or $100,000)

While many naysayers that this halving cycle will not result in another moonshot for Bitcoin bulls, Plan B's Stock-to-Flow model predicts that the BTC price should hit $100,000 before 2021. Otherwise, it will simply be invalidated. The Bitcoin expert also offered a more 'conservative' model that foresees Bitcoin reaching $50,000 after the block reward will be reduced to just 6.25 BTC.    

According to data provided by Digitalik, the BTC price continues to follow this model after getting a bit ahead of its after BTC's failed rally to $9,000.  

image by @digitalik.net

Will BTC skyrocket to this level? Share your prediction in the comments!  

About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

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