2019 was a rollercoaster year for Bitcoin, as the world’s biggest cryptocurrency went on an incredible rally in the first half of the year, but then gave up some of the gains. The second half of 2019 proved to be particularly disappointing for the market as BTC failed to reach the heights that had been expected.
Bitcoin ended the fourth quarter with a sequential loss of as much as 21.5%, and the fall in the second half of 2019 was pegged at over 33%. It is quite clear that things have gone downhill over the past six months. However, experts believe that two important factors could spark a recovery in Q2 2020.
Key Factors to Watch
One of the biggest factors that could result in a bull run in Bitcoin is the continued uncertainties in the capital markets in the first quarter of the year. The uncertainty about the trade deal between the United States and China is going to cause many investors to avoid the capital markets. Instead, they might try and invest in safe havens like gold and BTC. Hence, it could lead to a short-term spike in the price of BTC if investors start piling onto it in order to park their cash.
While the geopolitical and macroeconomic issues could well boost the price of BTC, there is another factor that could further help with a rally as well. There is going to be a halving of BTC in May this year, and analysts believe that once this happens, the cryptocurrency will become scarcer. Since the rewards are going to be halved, there is going to be less mining and, by extension, greater scarcity.
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Some analysts believe that the halving could result in bullish tendencies and eventually push up the price of Bitcoin past $8,000. It goes without saying that a crucial period is coming up for BTC, and market watchers could do well to track the token closely.
Featured image: DepositPhotos © AntonMatyukha
