Once again the last 24 hours have seen the granddaddy of all cryptocurrencies test but fail at the $10k mark.
Bitcoin for much of the last few months appears to have developed a phobia of going past $10,000.
It has become such a barrier that Bitcoin being unable to break over the $10k mark has developed its own conspiracy theories.
However, it’s hard to dispute that factions within the crypto community, as well as interested onlookers, have latched onto Bitcoin’s $10,000 price point as a key point of critical inversion. In fact, the volume of eToro BTC trades have started to accelerate again due to this development.
The recent Bitcoin Halving was supposed to be for many, the opportunity of Bitcoin to break free of its shackles a bit more and make Bitcoin Price Prediction an easier task.
However, what was thought to be a gradual increase in the price of Bitcoin, has, for a variety of reasons seen the Bitcoin price stall at the now mythological $10k mark. So, why are not seeing the price of Bitcoin above $10k?
The Covid-19 Effect
The first quarter of 2020 saw volatility levels go off the charts. Literally in the case of Oil futures. The global pandemic has wreaked havoc upon economies across the world and we are not out of the woods yet.
Both Crypto exchanges and forex exchanges saw record volumes amidst the volatility. However, volatility is good for short term profit taking and not for long term growth which is having an effect upon Bitcoin’s price and it’s failure to spike past $10k consistently.
Bitcoin’s Safe Haven Status Questioned
A myth that was all but dispelled was that Bitcoin was a reliable safe haven asset. As geo-political concerns dominated the trading charts, Bitcoin didn’t pass the safe haven asset test.
Although Bitcoin (BTC) fared better than others, recent market-moving events have shown that even digital currencies suffer when other assets do.
The Curse of 10,000
Now, we’ve established that Bitcoin and other digital currencies are just as susceptible and vulnerable as the fiat and stock world, we have to talk about the curse of the 10,000.
CNBC Senior Editor John Carney wrote of “The Curse Of Dow 10,000,” a phenomenon that described the way that from 1999-2003, every time the Dow would hit the 10,000 mark, it would “succumb to a bear market and fall below it ever time.”
Carney noted that people traded psychological points. He called these investors ‘psychological arbitrageurs’, saying they “reinforce what otherwise might be an irrational market behaviour, as the traders try to make money by betting that the market will gyrate when it hits key psychological points.”
Can Bitcoin Break $10k and Sustain Growth?
Whether Bitcoin can break $10k again and sustain growth is not a difficult question to answer. It has done it before and it will do it again. Despite all its ineffectiveness, privacy and security concerns, Bitcoin is still the master of the cryptocurrency world.
As global economic uncertainty continues, the role and adoption of digital currencies like Bitcoin will only become more significant and eventually that $10k barrier will seem a distant memory. How long for?well that’s another story.
