Bitcoin Price Trades Above $16k for the First Time Since 2017

Data & Research / 12.11.2020

Bitcoin has today continued its bullish rally, crossing yet another important milestone. The coin has broken the $16k-mark for the first time since December 17, 2017, the last time it managed an all-time high price of $20 000. 

Until today, the $16k price mark was viewed as a heavy level of resistance by traders due to the abundance of sell orders in that region. However, the filling of large sell orders at $16k by the whales led to the weakening of the resistance level with repeated price retests throughout the past week before the actual breakthrough today. 

Why Now?

While many have happened in three years to ascertain Bitcoin’s current price, several key factors have greatly contributed to the flagship coin achieving this milestone. Reputable analysts believe these factors include the recent drop in Bitcoin’s derivatives market, a weakened resistance, and strong support. 

The Drop in Bitcoin’s Derivatives Market

Bitcoin derivatives have witnessed enormous growth in recent years as investors look to hedge risks in BTC trading. However, the recent reports of a possible Covid-A9 vaccine saw BTC drop below the crucial support at $15 000 to trade at $14 800. While this led to traders becoming cautious, it was instrumental in Bitcoin’s price rise. The reset in the Bitcoin derivatives market increased sell orders at the $15 000 support level, which neutralized the future market – a scenario that sustained the BTC price rally. 

Weakening Resistance and a Strong Support

Until today, the $16 000 price region was a heavy level of resistance for Bitcoin. Increased sell orders by the whales at the resistance level weakened the resistance allowing BTC bulls to push through it easily. Additionally, the support level at $ 14 900 is held perfectly because of the strong Bitcoin whale clusters at $13 600, $13, 740, $14, 120, and $14, 900. 

The New ‘Censored’ Mining Pool Could be A Menace to Bitcoin Miners

BlockSeer– a Blockchain analytics platform has launched a private beta version of a new Bitcoin (BTC) mining pool, i.e., BlockSeer Mining Pool, which censors transactions from blacklisted wallets. The pool seeks to identify Bitcoin transactions from known disreputable wallets by using BlockSeer and Walletscore’s labeling data, among other verified sources, notably the United States Office of Foreign Assets Control (OFAC) crypto blacklist. Additionally, the pool requires all miners to pass Know-Your-Customer (KYC) protocols. 

Unfortunately, despite being a newly launched protocol, analysts already view BlockSeer to affect Bitcoin prices negatively. By adding more privacy to Bitcoin and filtering transactions, Bitcoin mining pools could soon follow in the steps of BlockSeer, which could prompt a soft fork where Bitcoin mining pools performing transaction filtering would reject building on blocks of miners without such an approach. That means transaction censorship would see miners mine at a loss or charge market fees to avoid censorship. Whatever the case, it is still too early to speculate what would happen by introducing Bitcoin’s transaction censorship.  

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Wayne is a Blockchain enthusiast and expert in crypto trading. Currently, he covers trendy issues on digital currencies.