Bitcoin(BTC) rally 2020 could happen for two reasons

While bitcoin suffered a negative price momentum towards the end of 2019, some investors predict that a reversal is about to happen in 2020. Analysts believe that there are two major factors that might potentially contribute to the cryptocurrency’s rally.

According to NewsBTC, one of the factors that could help nudge bitcoin into a rally is macroeconomical events. The publication even said that one such event is about to happen as President Donald Trump already announced the signing of the Phase One Trade Deal with China.

“I will be signing our very large and comprehensive Phase One Trade Deal with China on January 15,” President Trump tweeted. ”The ceremony will take place at the White House. High-level representatives of China will be present. At a later date, I will be going to Beijing where talks will begin on Phase Two!”

According to the publication, bitcoin served as a safe-haven instrument at the height of the trade war last May. But with the positive development, it’s possible that investors will unload their BTC holdings pushing the token down to $6,000-6500 range.

At this price level, bitcoin will be very “attractive for reaccumulation.” Coupled with some market analysts’ view that Phase One is “uninfluential,” some investors will likely reallocate some of their funds in the crypto market, which could potentially start a bitcoin rally.

Another reason that might trigger a rally this year is the phenomenon called halving. This refers to the trend which happens every few years wherein the amount of BTC tokens that miners get as block reward will be halved.

Historically, a bitcoin price rally followed months after the two previous halvings. The first halving happened in 2012 when the block reward decreased from 50 to 25 BTC. A year later, bitcoin’s price rose by almost 8,000 percent in a year, according to Aljazeera.

The second halving happened in 2016. Around 18 months later, the token’s price rose by more than 2,200 percent.

The third halving will happen in May 2020. According to NewsBTC, some analysts say that there’s a “99.6 percent success rate of an upside price rally after halving.” Due to this anticipation, some predict that BTC might even surge towards $8,000 as May approaches.