Bitcoin (BTC) has delivered awe-inspiring volatility in the days before its third block reward halving — but what should traders look out for as the event hits?

Cointelegraph takes a look at what factors to consider for traders and hodlers in one of the top-ranked cryptocurrency’s most important weeks so far.

A record Bitcoin futures gap hits

Monday is on track to open with seemingly the largest Bitcoin futures gap in history — over $1,200.

Futures gaps occur when the start of one weekly trading session on futures markets is substantially different from where they left off at the end of the previous week.

On Friday, BTC/USD circled $9,800 on CME Group’s futures trading. Currently, it is closer to $8,600.

CME Bitcoin futures daily chart showing the latest gap. Source: TradingView

Looking back, Bitcoin has a history of rising or falling to fill these futures “gaps,” and in this case, that would come in the form of a rebound.

Hash rate leads fundamentals 

Just one day before the halving, it appears that Bitcoin miners are increasing activity. Despite markets’ $1,200 slump over the weekend, the hash rate is still lingering at all-time highs, data suggests.

According to estimates from Blockchain, the Bitcoin network hash rate currently totals 136 quintillion hashes per second (h/s). 

Two days ago, this was 109 quintillion ― a 15% decrease to match price performance has yet to be registered.

Bitcoin hash rate (raw values) 1-month chart. Source: Blockchain

Monday marks the last day that block rewards deliver 12.5 BTC per block. From Tuesday or even earlier, the reward will be 6.25 BTC.

Inflation doomsday for fiat

Bitcoin’s “hardening” as money is occurring at a time when the outlook for fiat money looks increasingly uncertain.

As a result of rampant money printing in response to coronavirus, new warnings claim, a major episode of inflation awaits the United States and other major economies. 

While the virus itself is ebbing, the true impact of the financial cost is only beginning to attract public attention. As Cointelegraph reported, U.S. debt alone hit $25 trillion for the first time in history last week. 

All according to plan for BTC

Regardless of volatility in Bitcoin this week, price-performance is still broadly in line with predictions made by one of the industry’s best-known models.

According to stock-to-flow’s predictions, the current BTC/USD price of $8,800 is perfectly acceptable and does not suggest anything out of the ordinary.

Bitcoin stock-to-flow chart as of May 11. Source: PlanB/ Digitalik

Perhaps uniquely accurate at charting price, stock-to-flow even accommodated markets’ 60% drop in March.