Bitcoin for $ 8,900 makes a profit in April for the fifth consecutive year

Bitcoin's price surged over $ 8,900 on Wednesday, generating an almost certain April profit for the fifth consecutive year.

Green April for Bitcoin

A gain in April would be confirmed if prices continued to stay above $ 6,428, the monthly opening price, until the UTC close on Thursday April 30th.

But while it is true that a fall in prices over the next 24 hours cannot be ruled out, a drop down to below $ 6,428 seems unlikely, as technical studies tend to be bullish and the speculative buzz surrounding the imminent halving of the reward mining will likely limit any losses.

In fact, bitcoin looks set to end April on a positive note, as has happened in the same month over the past four years. Bitcoin has performed well in April in six of the past eight years. The cryptocurrency suffered moderate losses in the two remaining years.

The most performing asset

Bitcoin's price performance seems even more impressive if we consider the fact that it is eclipsing other important assets with large margins. While cryptocurrency has risen more than 25% this month, gold, the classic safe haven asset, has gained 6.4%.

Meanwhile, the S & P500, the Wall Street stock index, rose 10.8% in April. The dollar index, which tracks the value of the dollar itself against the major currencies, is reporting marginal gains.

Meanwhile, West Texas intermediate crude oil, the North American oil benchmark, fell 36%. Oil prices plummeted earlier this month due to the huge drop in demand generated by the coronavirus epidemic that saw full-capacity storage facilities around the world.

The implications of halving and the COVID-19 pandemic

Matthew Dibb, co-founder and COO of Stack Funds, told the media on April 1 that halving would create upward pressure on the price of bitcoins.

There was also a general view on the market that bitcoin would grow in April following unprecedented monetary and fiscal stimuli launched by authorities around the world to contain the economic fallout resulting from the coronavirus epidemic.

Both the billions of stimuli and the bullish halving narrative could continue to give good impetus to short-term bitcoin. After halving, however, the cryptocurrency may face selling pressure.

"This time, the news of the bitcoin halving is widely known, so it is less likely that it will push prices up as much as it did the last time," said Andy Ji, co-founder of Ontology, a blockchain public and distributed collaboration platform.

Indeed, the halving has been widely discussed for more than a year and the market may have assessed it extensively. Reducing block premiums by half also means miners will have a hard time making a return on their investments.

Therefore, if prices fail to rise, some miners may exit the market and unload their holdings to cover costs, leading to a deeper drop in prices.