Overall, bitcoin traded traded above $1,000 for roughly the first eight hours of the day, reaching as much as $1,007 during the session, CoinDesk Bitcoin Price Index (BPI) figures reveal.
Prices fell below $1,000 at 08:15 UTC, however, and failed to break through that level for the remainder of the day.
At the time of report, the currency was trading at $998.42, according to the BPI.
All eyes on China
According to analysts, traders remain reluctant about placing bets in the market, as concerns linger about further actions from the People’s Bank of China (PBOC), the nation’s central bank.
The digital currency has experienced significant volatility in the last several weeks, as the PBOC’s decision to crack down on domestic exchanges has caused these marketplaces to announce a slew of sudden policy changes.
Huobi, OKCoin and BTCC (previously called the ‘Big Three’ exchanges) all announced they would impose consistent fees, cut margin trading and halt or slow deposits and withdrawals denominated in digital currency in recent days.
These continued developments have made some market participants reluctant to trade bitcoin, according to BTC VIX, community moderator for trading group Whale Club. He told CoinDesk:
“I wouldn’t hold any position for more than a few hours because the PBOC will continue to be active and exchanges certainly have more announcements over the next 30 days,” he said.
So far, there’s evidence backing this theory, as traders put in a large number sell orders around the $1,000 price point. This resistance was confirmed by both order book data and the input of market analysts.
Tim Enneking, chairman of Crypto Asset Management, weighed in on this development:
“Bitcoin is definitely encountering technical resistance. $1,000 is a level that is going to take some time to break.”
Petar Zivkovski, COO of leveraged bitcoin trading platform Whaleclub, offered similar input.
“The $1,000 level is indeed a strong psychological resistance. Bitcoin will need to cleanly break above $1,000 (high-volume rise and sustained price action above 1000) to transform that level into price support,” he continued.
Still, he added that there are potential bullish catalysts, citing the March approval of a Bitcoin ETF or positive regulatory news from China as two possible boons.