Bitcoin’s supply shock could cause next rally, analyst says

Bitcoin has crossed $ 13,000 for the third time.

A supply shock could spark the next major rally.

The next target for BTC is the 2019 high, located at $ 13,800

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The price of bitcoin has returned to over $ 13,000. A halving supply shock theory suggests that the next big bullish cycle may be about to begin.

Profit Secret scam is undeniably in its most bullish state for 16 months, and it’s only a few hundred dollars past its 2019 high, which could lead to a significant rise.

Since around the same time last weekend, the asset has gained an impressive 15%, outperforming most of its crypto counterparts. Market dominance also returned to its highest level in three months, around 62%, according to TradingView .

Shock of halving supply

Analyst and charts guru Willy Woo noted that it has now been over five months since the halving passed. He added that this is the time it took in previous cycles for supply shocks to cause bitcoin’s price to skyrocket in the next cycle.

A timely explanation of bitcoin halvings and the supply shock.

It is time, because we are now five months past the halving; in the last cycle, this was about the time it took for the supply shock to push the price of BTC up into a FOMO-induced bull run.

This notion is based on the theory that the bitcoin halving, which took place in mid-May, results in a halving of the supply. But the net demand remains the same, so from that point on, a shortage of supply accumulates.

The model was detailed by Twitter user “Croesus” [@Croesus_BTC] , who added:

Prices rise as market participants bid for considerably reduced “available-for-sale” reserves. In a typical market, this provides an incentive to increase the production of more supply and sell more products from existing carriers.

He added that due to bitcoin’s characteristics as a starting store of value, the majority of people do not yet occupy a significant position there, leading to an increase in prices and demand. The new demand is growing faster than what the „hodlers“ are willing to sell, causing the rate of accumulation of shortages to increase sharply, he continued.

The analyst concluded that a phase of frenzy then ensues, which ends when the willingness of the hodlers to sell causes demand to fall.

I believe that’s the signal beneath the din – the mechanics at the heart of how halvings drive parabolic 18-month bull markets.

BTC as a key join

Currently, the price of bitcoin is at a key inflection point. In the last great cycle, BTC gained almost 200% in just one month, going from under $ 6,000 to over $ 20,000 in a very short time.