Bitcoin has been pushing steadily closer to $20,000, but has failed to reach this key milestone.
The world’s largest digital currency by market capitalization (market cap) has risen to as much as $19,783.21 on the CoinDesk Bitcoin Price Index(BPI).
After nearing the $20,000 mark, the digital currency’s price fell back, dropping to as little as $18,791.76 later in the day, additional BPI figures show.
Since then, Bitcoin has recovered somewhat, but has still failed to surpass the $20,000 level.
Bitcoin has broken through several key price levels this year, surpassing $5,000, $10,000 and more recently $15,000.
Market analysts have pointed to factors, including rising adoption, growing institutional interest and a steadily evolving regulatory framework, as helping push this digital currency’s price higher.
More recently, market observers have started singling out Bitcoin futures as being a major factor driving the digital currency’s price higher.
These derivatives contracts, which are helpful risk management tools, began trading on CBOE within the last week, and were scheduled to start trading today on CME.
Marouane Garcon, managing director of Amulet, a crypto-to-crypto derivatives platform that focuses on customer success and usability, emphasized that the launch of these futures played an important role in “Bitcoin’s rapid rise.”
Mati Greenspan, senior market analyst for social trading platform eToro, put it differently.
While “This party has been off the hook non stop since the beginning of the year,” “Everyone is letting out a special cheer as Wall Street enters the house,” he said.
However, Greenspan emphasized that “the party will go on with or without them.”
Bitcoin The ‘Default Cryptocurrency’
Chris Keshian, co-founder of the Apex Token Fund, a tokenized crypto fund-of-funds, stated that “Bitcoin has become the default cryptocurrency for retail investors.”
“Bitcoin has become synonymous with cryptocurrency, and Coinbase, now with more than 13 million accounts, makes it easy for speculators to set up an account and participate in this burgeoning asset class,” he added.
“The low barriers to entry, and the well known name, drive investors to purchase BTC,” said Keshian.
He emphasized that not only does Bitcoin have the strongest network of any digital currency, but “the number of people participating in the network is growing exponentially.”
At this point, readers might be wondering why Bitcoin hasn’t broken through the $20,000 price level, seeing as many different factors are pushing its price higher.
Charles Hayter, co-founder and CEO of CryptoCompare, singled out technical resistance as being the reason why Bitcoin prices have failed to surpass this key level.
His views were confirmed by Bitfinex data, which showed that in the last 24 hours, 53.6% of all orders were sell orders.
This resistance is causing Bitcoin’s rally to lose momentum, said Hayter.
If Bitcoin traders decide that this is a good time to take profits, the digital currency could face continued resistance.