Over the past eight weeks, Bitcoin has surged past resistance after resistance in its rally from $3,700 to $9,700 — the price as of the time of this article’s writing.
This move has been undoubtedly impressive, with the price action attracting mainstream media attention and Wall Street investors. However, analysts say it’s not clear skies ahead for Bitcoin just yet, pointing to a key resistance the cryptocurrency is rubbing up against.
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Bitcoin Crossing $10,500 Will Open Price to New Highs
If you have perused Crypto Twitter over the past few months, you’ve likely noticed the weight analysts have given to the $10,500 price point for Bitcoin. The level, as can be seen in the chart below, has been key on a number of occasions over the past few years, marking the top of rallies two times in 2019 and once earlier this year.
With Bitcoin rallying near this level once again, analysts have begun to tout its importance. The lead technical analyst at crypto research firm BlockFyre wrote:
“If Bitcoin gets over this. There isn’t much standing in the way of new all-time highs. They’d be on the horizon. Way less resistance than anything BTC overcame going from 3.7k to here. Would be a macro higher high confirmed. Don’t underestimate the implications!”
This was echoed by another trader, who shared in April that if Bitcoin manages to flip $10,500 into support, his bearish bias will flip bullish. This is especially notable as this is the same trader that called for BTC to revisit $3,000 months before it did.
Breaking $10,500 Likely to Be a Struggle
Bitcoin may struggle to break past $10,500, though, market data indicates.
Per previous reports from NewsBTC, order book data of Bitfinex’s BTC/USD market shared by a popular crypto trader indicates that there is a massive block of orders looking to sell Bitcoin around $10,000 that may be hard to break past.
Bitfinex’s order book suggests that from $9,900 to $10,600, there is ~4,200 Bitcoin worth of sell orders, most of which are clustered around $10,000-10,400. That means on one exchange alone, there is over $40 million worth of sell-side pressure if the cryptocurrency attempts to rally past $10,000.
Adding to this, an analyst recently observed that Bitcoin’s latest price action has led the funding rate on OKEx to spike, indicating bulls are overextended and may soon capitulate:
“Funding on OKEX is suddenly very high again,” he said while pointing to the chart seen below.
Featured Image from Unsplash
Author: Nick Chong