Tonight the price of Bitcoin (BTC) hit a low of about $8,750, and then a partial recovery to the current $8,850. The combination of miners selling more BTCs than they produce, the price of six consecutive lower highs and the $8,800 support retest makes BTC vulnerable to an intense pullback.
Six consecutive lower highs from June 19 to date
Since June 19 last year, could donald trump ban bitcoin?, bitcoin naysayers like r3, first took action, analysis of the bitcoin white paper, updated its terms and conditions, the world’s currency, yet more calls, to collect taxes in bitcoin, a new fintech license, initial exchange offerings has recorded six consecutive lower highs: the price increase was rejected at $14,000, $13,300, $12,300, $10,600, $10,500 and $10,000.
In technical analysis, the lower highs indicate that buyers are unable to establish new bullish cycles: when one of these lower highs is reached, the selling pressure in the market proves to be too strong and the growth is interrupted.
The rejection of the area between $9,800 and $9,900, combined with the second test of support at $8,800, suggests that Bitcoin is not yet ready for a rally above $10,000.
BTC continues to test the support at $8,800…
For the second time in the last four days, Bitcoin’s price tested the support at $8,800. Usually, when a cryptocurrency tests a key support three or four times in a row, the chances of a contraction below that level increase exponentially.
In addition, TradingLite data shows a large number of OKEx sell orders placed between $9,300 and $9,400.
As there are many buyers on OKEx at $8,800 support and there is strong pressure to sell at $9,300, it is likely that the price of BTC will continue to fluctuate between these two levels.
However, a new pullback below $8,800 could slide the cryptocurrency price up to the $6,000 to $7,000 range.
Strong selling pressure from the miners
Meanwhile, Bitcoin miners continue to sell more coins than they produce. For mining activities to reach break-even, BTC’s price would have to be over $12,000.
But right now the value of the cryptocurrency is much lower, which means the miners are forced to sell a portion of their stock to cover their expenses.
On Twitter, analyst Willy Woo explained that in the Bitcoin market there are mainly two entities that create strong sales pressures: miners and exchanges.
In particular, Woo said:
„There are only two major sellers in the market. (1) Miners, which dilute the supply and sell in the market. This is a kind of hidden tax, caused by monetary inflation. And (2) Exchanges, which tax traders and sell in the market.“