- Many analysts and investors have been quite surprised at how stable Bitcoin’s price has been despite a plethora of bear-favoring developments within the markets
- From a macro perspective, President Trump’s recent viral diagnosis has rocked the traditional markets, which has had a trickle-down effect on crypto
- Within the crypto market, the recent $150m KuCoin hack, as well as the government’s charges against the BitMEX founders, have both spooked investors
- Despite all these factors placing pressure on Bitcoin, the cryptocurrency has yet to plunge lower
- One analyst is noting that there’s a simple explanation for why this is the case
Bitcoin has seen a jarring past couple of weeks, with buyers and sellers both being unable to garner control of its mid-term outlook.
Bears have been attempting to push BTC lower, but so far, they have been unable to push it below any crucial levels.
This has been quite surprising to analysts, as the barrage of bad news seen as of late would have, in previous years, catalyzed far-reaching selloffs.
One analyst is noting that there’s a simple reason for why Bitcoin’s reaction to this bearish news is so different than its reaction in years past.
He points to the low balance of BTC on exchanges, coupled with plummeting open interest on BitMEX, noting that there simply isn’t enough spot crypto circulating to nuke the price.
Bitcoin Sees Consolidation Trend Despite Bearish News
Throughout the past few days and weeks, Bitcoin has been unable to garner any decisive momentum as its price trades within the mid-$10,000 region, despite an onslaught of bear-favoring developments.
Both buyers and sellers have largely reached an impasse. This has resulted in an incredibly narrow consolidation phase between $10,500 and $10,600 as its volatility evaporates.
Until this volatility returns, it’s unlikely that investors will gain any clear insights into where it will trend next.
Here’s Why BTC’s Price has Yet to Nuke Any Lower
One analyst explained in a recent tweet that the reason why Bitcoin’s price has yet to nuke lower on the recent news is due to a lack of circulating spot BTC on exchanges.
“Since the Bitmex / Trump news came out, Mex has lost 30% of its open interest (mostly longs closing) and price is only down 3%. There’s no spot corn left on exchanges to dump either. There’s almost no way we can dump hard here,” he said.
Image Courtesy of “DeFi Ponzi Fund.” Chart via CryptoQuant.
Because most of the Bitcoin supply is still in cold storage or is being moved off of margin trading platforms like BitMEX, there’s not too much sell-side pressure at the moment.
Featured image from Unsplash. Pricing data from TradingView.