Want to break $10,000? Bitcoin faces 5 major resistances

According to comparison data, after the completion of block reward halving this week, although Bitcoin, the cryptocurrency with the largest market value, has risen, it has not been able to break through $10,000.

The encryption media Cointelegraph published an article stating that the five major resistances in terms of open interest, trading volume, long-short ratio, bearish divergence, and liquidity are preventing Bitcoin from breaking through further.

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In terms of open interest, open interest in Bitcoin futures contracts on BitMEX, Binance Future, Bybit, and other futures exchanges is stagnating.

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Hours before the Bitcoin block reward halving on May 10, the price of Bitcoin on the BitMEX exchange suddenly dropped from $9,570 to $8,100, liquidating some $200 million worth of longs within an hour. Open interest on BitMEX dropped significantly as many long contracts were liquidated or forced to adjust positions. On May 14, the price of Bitcoin similarly experienced a rapid decline, which resulted in the liquidation of $42 million longs. In five days, at least $270 million worth of longs were liquidated on the BitMEX exchange alone.

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In terms of trading volume, investors appear to be less willing to trade in the futures market after two sell-offs. It could potentially indicate that buyers have shown signs of exhaustion as selling pressure builds at the major resistance at $10,000.

Among the three major futures exchanges Bitfinex, Binance Futures and BitMEX, long contracts accounted for approximately 72.37% of the total open interest. As of May 15, approximately $661.7 million worth of long positions had been opened, but only $252 million of short positions had been recorded. The large gap between bulls and bears in this resistance zone makes Bitcoin vulnerable to squeezed bulls.

A bearish divergence is currently taking place, as measured by the relative strength index (RSI), meaning that when Bitcoin’s RSI value falls, the price of Bitcoin rises. A bearish divergence on the price chart indicates that a larger pullback is likely. The decline in the RSI value and the slowdown in Bitcoin trading volume may lead to a weakening of the upward momentum in the short term.

For large traders, liquidity in a relatively small market is key. Bitcoin's price often moves wildly as big traders seek liquidity at significantly lower or higher prices.

So when the price of Bitcoin failed to break through $10,000, there were a lot of sell orders on OKEx and BitMEX. Two sell-offs at a key resistance level in five days have raised the odds that bitcoin prices will continue to fall.

Based on these factors, although Bitcoin is still bullish in the long run, it may take some time to break through the resistance level of $10,000.

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