Unique Events Continue to Block Bitcoin from $10,000
Breaking above $10,000 might not be as certain as the technical set up indicates.
Key Takeaways
- After the recent halving, some of the most prominent analysts in the industry believed that Bitcoin was on the cusp of a major bullish breakout.
- However, there is a major barrier ahead that puts this bullish outlook in jeopardy.
- When analyzing the nature of this resistance wall, there are some unusual indicators that emerge.
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Despite Bitcoin’s best attempts to cross the $10,000 threshold, a series of unique events throughout the month have blocked the top crypto from further advance.
Bitcoin Can’t Break $10,000
The $10,000 resistance level has proven to be a significant obstacle for Bitcoin to overcome.
From a technical perspective, the resistance is part of a descending trendline that can be drawn from each major peak since the December 2017 all-time high of nearly $20,000.
These include the late June 2019 peak of $14,000, the mid-July 2019 high of $13,200, the early August 2019 spike of $12,300, and the mid-February 2020 high of $10,500.
From a fundamental point of view, however, the strength of the $10,000 resistance level seems to be backed by the hidden entities behind the market and a wave of fear, uncertainty, and doubt.
Indeed, the first time in May that Bitcoin took aim at this hurdle was right before the block rewards reduction event, also known as the halving. At the time, Crypto Briefing reported a noticeable change in the behavior of large BTC holders.
These big players started accumulating in mid-April signaling they were preparing to dump their holdings on unaware investors. This is exactly what happened.
After Bitcoin jumped above $10,000 before the halving, the selling pressure behind it increased substantially leading to a 20% nosedive.
Then, as the pioneer cryptocurrency bounced back towards the aforementioned resistance wall, Whale Alert reported that 5,632 BTC, worth nearly $56 million, were transferred out of exchanges.
The on-chain transactions tracking firm also noticed an unusual movement of 4,588 BTC in and out of Xapo.
Similar behavior occurred around May 17. While Bitcoin was recovering and again moving towards $10,000, many crypto media outlets started to talk about a spike in the network transaction fees.
Data from BitInfoCharts reveals that in less than a month, transaction fees skyrocketed by more than 1,250% from $0.38 to $5.16. Many viewed the news as negative triggering a 5% correction on May 18.
And one day later, after bouncing off sharply, BitMEX trading engine inexplicably crashed wiping over $11 million worth of long and short BTC positions.
The final nail in the FUD coffin came yesterday.
As investors and market participants alike were preparing for a breakout of the infamous resistance, 50 BTC, untouched for over a decade, moved wallets.
What came after was a major sell-off that pushed prices down by more than 6%, as many speculated that Satoshi Nakamoto began dumping his coins.
This series of events is likely uncorrelated. Still, this activity could see the bellwether cryptocurrency could be bound for a wild ride towards $6,000.
Such a bearish impulse may help flush out some of the so-called “weak hands” and allow sidelined investors a path back into the market.
A new inflow of capital from this price point might finally propel Bitcoin to move past the overhead resistance and march towards new all-time highs.
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