Bitcoin searches are on the rise based on Google Trends data, with more people having searched for the leading cryptocurrency in recent days. Typically, bitcoin Google searches coincide with a bullish crypto market, but not this time. The bitcoin price dropped below the psychologically sensitive $7,000 level over the weekend, reflecting a decline of roughly 20% since mid-November. The spike in bitcoin searches is concentrated in a handful of countries across Nigeria, South Africa, Ghana, Austria, and Switzerland. The last time this many people were searching for bitcoin was in October when the bulls were still in control and the price was nearing $10,000.

Bitcoin Halving

The ramp-up in interest surrounding the bitcoin price could have something to do with the upcoming BTC block reward halving event, which is scheduled for May 2020. In fact, the number of Google searches for “bitcoin halving” is similarly trending higher and is revisiting October high levels. The most popular regions for Google bitcoin halving searches are Netherlands, Slovenia, Switzerland, South Africa, and Singapore.

Crypto analyst Willy Woo recently observed that the bitcoin halving of 2020 will be like none other we’ve experienced before. Woo remains “short-term bearish” and doesn’t expect the bitcoin market to play out similarly to past bitcoin halving events. He points to “weak miners” who have dropped out of the market as the bitcoin price has been slashed about in half from a 2019 high of nearly $14,000.

Jihan Wu, who is at the helm of China-based crypto mining leader Bitmain, has similarly warned that market conditions are different this time around headed into the halving event. Wu is quoted in reports as having stated:

“We are currently in a short-term correction of price. Having a long-term perspective is significant. If bitcoin’s price remains unchanged after halving, the efficiency of existing [mining] equipment must be improved to balance efficiency and computing power.”

Economist and analyst Alex Kruger points out that the BTC price has shaved off 30% from its value since August, which is when the U.S. Federal Reserve began expanding its balance sheet. This puts to rest the theory that the Fed’s decision to print more money would send the bitcoin price higher, given that the BTC price is currently trading below $7,000. Kruger states:

“Added liquidity can only help price, but BTC doesn’t respond to macro variables. It is such an illiquid/fragmented market that in the absence of mass influx of new buyers, actions of a few determine direction. Micro, not macro. Only narrative still standing is the halving/s2f.” 

Indeed, given the low liquidity in the crypto market, investors are quite vulnerable to bitcoin whales. These are early investors holding large amounts of BTC and who have the ability to “move the price with a single order,” as explained by Mati Greenspan, Founder of QuantumEconomics.io. Incidentally, one such whale has moved 44,000 bitcoins, which at current prices is worth more than $300 million, a transaction that cost merely pennies to complete.

Meanwhile, one theory for the sell-off in the crypto market, which has extended beyond just bitcoin and extends to the broader crypto market, is tax selling. Adamant Capital’s Tuur Demeester introduced the argument that crypto tax loss harvesting could be behind the selling.

While the bitcoin price might be up for the year, Demeester points out:

“Between the 2017 and 2019 rallies there must be a number of investors with a taxable base of +$7,000 BTC.”

In the U.S., investors could sell crypto between now and year-end 2019, buy back into the market in early 2020, and still treat the event as a capital loss on their taxes.