The day that many cryptocurrency traders and market analysts anticipated is finally here. On May 11, the most valuable digital currency in the world went through a scheduled event known as "the halving," which happens every four years until the set limit of Bitcoin tokens have been mined, thus fulfilling the intent of the blockchain created more than a decade ago by the mysterious Satoshi Nakamoto.
Investors had very high hopes that Bitcoin would reach touch the $10,000 price level just before the halving, but it seems that very active traders took precautions and collected profits in the hours before the event, thus causing the exchange price to walk back to $8,263. The drop was not as volatile as it may have been in previous years, but it dampened the spirits of traders who had been riding a bullish rally since March.
The Bitcoin halving takes place every 1,386 days; in essence, what gets cut down by a half is the number of tokens that miners can potentially earn as a reward for the work they have performed to keep the blockchain network active and secure. What miners effectively do is clear very complex transactions on powerful hardware rigs equipped with considerable processing power. Mining networks consume a lot of electricity and bandwidth, but they are worth the effort when Bitcoin exchange prices are high.
As the clock approached midnight on Monday, BTC/USD was on a gradual track to reach $8,600, but trading volumes and technical signals did not guarantee that a support line would develop around $8,800, which is a level many analysts think would be necessary for Bitcoin to touch the highly psychological $10K mark.
Support levels during Bitcoin rallies are envisioned at $1,000 intervals. Should BTC/USD be able to hold $8,800 for a 24-hour trading session, getting to $9,800 would require gradual gains and some trading stability for a few days. Things change once $10K is reached because many traders consider this price level as a warning that active investors will likely move to take profits. At the Chicago Mercantile Exchange, futures traders were mostly shorting Bitcoin on Monday, but not as much as they did in February.