Bitcoin spends the day testing resistance on its push to $6,000
Bitcoin is straining to approach the key $6,000 range.
The consensus on the street is that Bitcoin prices are in for a big move one way or the other. It's tightening into a narrow range following a growth spurt earlier in the day, which traditionally heralds a relatively big bounce one way or another.
The precedent set by previous months probably has many wary traders anticipating a sharp fall any moment now, but others are pointing out that history won't necessarily repeat itself this time. Bitcoin has bounced from yearly high to high in its recent set of rises, so what happens next is still anyone's guess.
If you trust the pattern set at the start of April, you might reasonably expect another upwards surge.
On the other hand, Bitcoin is crunching into resistance and has yet to make a meaningful break into the $6,000 range, which some traders suggest means it's definitely not out of the woods yet. The $6,000 resistance line has often been highlighted as a crucial test for Bitcoin, and its failure to make a meaningful move into that territory is keeping people on the edge of their seats.
If traders get too far on the edge of their seats, they fall off and might accidentally sell all their Bitcoin while clutching for a handhold.
Either way, it's clear that Bitcoin has been straining against some serious resistance all day.
Note that lines on the chart below don't actually mean anything. They're just there to lend the diagram more of an air of authority.
The day hasn't seen too much other market information to give a clue what's going to happen next, but the Bitfinex imbroglio is continuing and the markets are probably starting to adapt to it by now. One of the more puzzling elements is how incredibly resilient the Bitcoin price premium on Bitfinex is continuing to be.
Traders are clearly getting out of the exchange, and Bitfinex cold wallets are showing withdrawal symptoms, but the price premium is just hanging around clearly and consistently at around 6% for Bitcoin and 5% for USDT.
The most likely explanation is that fiat withdrawals are still being highly problematic, and that 5-6% is deemed to be an acceptable haircut for the traders who want to get out. That they clearly are getting out en masse is perhaps a worrying sign for the market.
But it's not the only platform trading at a premium. Grayscale's Bitcoin trust is reportedly trading at a hefty 33% premium, which is figured to be a healthy sign of institutional interest in accumulation. Or maybe that's just the Bitfinex whales departing for Grayscale?
Disclosure: The author holds BTC, BNB and ATOM at the time of writing.