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As Bitcoin Consolidates, Here are the Crucial Levels that Will Determine Its Future

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  • Bitcoin has seen a strong rebound from its recent lows, but the cryptocurrency still remains caught within a firm consolidation phase between $9,900 and $10,300
  • The benchmark crypto is currently testing the upper boundary of this range, but its momentum is somewhat tempered at the moment and appears to be faltering
  • Whether or not it can push any higher in the near-term may depend almost entirely on how it reacts to $10,300
  • One analyst is noting that a firm break above this level could be all that is needed for the crypto to see a strong push back up towards $11,000

Bitcoin is showing some signs of strength today, as it was able to avoid a plunge on a rocky open to the stock market futures yesterday afternoon, only declining as low as $9,950 before rebounding to $10,100.

In the time since, futures were able to rebound and allow the equities market to see a strong open, which in turn provided Bitcoin with a much-needed boost.

It is important to note that BTC has yet to break above the key near-term resistance that may be suppressing its price action.

One analyst is setting his sights on $10,300, noting that a clean break above this level could spark a move up towards $11,000.

Bitcoin Shows Signs of Strength Following Rocky Afternoon Yesterday

At the time of writing, Bitcoin is trading up just under 1% at its current price of $10,220, which is around the price at which it has been trading throughout the past few days.

Yesterday afternoon, however, bears attempted to thwart this stability when they pushed the crypto down to lows of $9,950, with this drop coming about in tandem with a bloody open to the stock market futures.

Bulls held strong, however, and the ongoing rebound that the stock market is seeing has provided BTC with some momentum.

Analyst: BTC May Rocket Towards $11,000 if It Can Hold One Key Level

One analyst explained that breaking and holding above $10,300 could be all that Bitcoin needs to start rallying towards $11,000. He also notes that $10,000 is the key support it must continue defending.

“Still holding between two crucial levels here. Support at $10,000 is holding, while a breakthrough of $10,225-10,300 could trigger a continuation towards $10,600 and possibly $10,800-11,000,” he explained.

Image Courtesy of Crypto Michael. Chart via TradingView.

Because Bitcoin has already tested this resistance on a couple of occasions throughout the morning, it should soon grow clear as to whether or not it will hold strong.

Featured image from Unsplash.
Charts from TradingView.





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China’s attempt to kill Bitcoin failed — Here are 3 reasons why

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Bitcoin (BTC) might have suffered its largest coordinated attack over the last couple of months, but in this instance, the investor community did not capitulate. China outright banning mining in most regions after giving BTC miners a two-week notice and this caused the single largest mining difficulty adjustment after the network hash rate dropped 50%.

The market sentiment surrounding Bitcoin was already damaged after Elon Musk announced that Tesla would no longer accept Bitcoin payments due to the environmental impact of the mining process. It remains unknown whether China’s decision was influenced or related to Musk’s remarks, but undoubtedly those events held a negative effect.

A couple of weeks later, on June 16, China blocked cryptocurrency exchanges from web search results. Meanwhile, derivatives exchange Huobi started to restrict leverage trading and blocked new users from China.

Finally, on June 21, the People’s Bank of China (PBoC) instructed banks to shut down the bank accounts of over-the-counter desks and even their social networks accounts were banned. OTC desk essentially act as a fiat gateway in the region so without them it would be difficult to exchange from Bitcoin to stablecoins.

As these events unfolded, some analysts were reluctant to describe the tactics as nothing other than meaningless FUD, but in hindsight, it appears that China launched a very well-planned and executed attack on the Bitcoin network and mining industry.

The short-term impact could be considered a moderate success due to the collapse in Bitcoin price and the rising concerns that a 51% hashrate attack could occur.

Despite the maneuvers, China’s attack ultimately failed and here are the main reasons why. 

The hashrate recovered to 100 million TH/s

After peaking at 186 million TH/s on May 12, the Bitcoin network hash rate, an estimate of the total mining power, started to plunge. The first couple of weeks were due to restrictions to coal-powered areas, estimated at 25% of the mining capacity.

However, as the ban extended to other regions, the indicator bottomed at 85 million TH/s, its lowest level in two years.

Bitcoin estimated hashrate. Source: Blockchain.com

As the data above indicates, the Bitcoin network’s processing power recovered to 100 million TH/s in less than three weeks. Some miners had successfully moved their equipment to Kazakhstan, while others shifted to Canada and the U.S.

Peer-to-peer (p2p) markets carried on

Even though the companies involved in crypto transactions have been banned from the country, individuals continued to act as intermediaries—some of these recorded over 10,000 successful peer-to-peer transactions according to data from the exchange’s own ranking system.

Huobi Global peer-to-peer market advertisement. Source: Huobi

Both Huobi and Binance offer a similar marketplace where users can trade multiple cryptocurrencies including USD Tether (USDT). After converting their fiat to stablecoin, transacting on a regular or derivatives exchange becomes possible.

Asia-based exchanges still dominate spot volume

A complete crackdown on trading from Chinese entities would likely be reflected in the exchanges previously based on the region, like Binance, OKEx, and Huobi. However, looking at the recent volume data, there hadn’t been a meaningful impact.

Weekly spot volume, USD. Source: Cryptorank.io

Take notice of how the three ‘Asia-based’ exchanges remain dominant, while Coinbase, Kraken, and Bitfinex are nowhere near their trading activities.

China’s ban on Bitcoin mining and transactions may have led to some temporary hiccups and a negative impact on BTC price, but the network and price have recovered in a way that is better than many expected.

Currently, there is no way to measure the OTC transactions where larger blocks are traded but it is just a matter of time until these intermediaries find new gateways and payment routes.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.