3 reasons why Bitcoin’s price continues to reject the $10,000

In the last hour, the price of Bitcoin (BTC) increased to USD 10,180 on BitMEX before quickly reverting to USD 9,600. The rapid rejection means that for the third time in 30 days the Bitcoin price has been rejected at the resistance level of USD 10,000.

Three factors that may have contributed to the volatility are: the Federal Open Market Committee (FOMC) meeting of the Federal Reserve, the settlement of short contracts worth USD 14 million and the continued resistance of the multi-year resistance area of USD 10,000 – USD 10,500.

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The Fed’s FOMC meeting
The Fed held a FOMC meeting shortly before the sudden increase in Bitcoin volatility and during the meeting, Federal Reserve Chairman Jerome Powell stated that the labor market may have touched his floor.

Since March, institutional investors have been cautious about the short-term trend of the stock market due to the state of the labor market.

Initially, the unemployment rate was projected to remain in the double digits and this was a major concern for high net worth investors. To guard against downside risk, these investors turned to safer alternatives such as low-risk bonds.

The last time this happened, BTC made 4 thousand dollars

According to Welt’s market analyst Holger Zschaepitz, Powell said

“We want investors to value risk the way the markets should. He] says that the Fed will never withhold support from the economy because it believes that asset prices are too high. Bursting the asset bubble would hurt job seekers.

Despite the positive data that came out of the Iq Option meeting, both the U.S. stock market and the price of Bitcoin fell afterwards.

The trend of the biggest digital asset in CoinMarketCap and stocks suggests that as soon as the Fed meeting ended, there was a ‘sell the news’ type of reversal.

16 million in settled Bitcoin futures contracts

Within a 30-minute window, $14 million in short Bitcoin contracts were settled on BitMEX alone. Compared to other exchanges, the BTC price increased more on BitMEX by about USD 100.

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As Bitcoin’s price reached $9,600 in a 4% drop in less than 15 minutes, another $2 million in long contracts were settled.

In total, in about one hour, about $16 million in futures contracts were settled in quick succession.

Due to the decline in spot volume on the Bitcoin market since early May, the futures market has accounted for a large share of BTC’s daily volume.

When tens of millions of dollars worth of futures contracts are settled in a highly volatile price movement in a short period of time, it can cause the BTC price to move quickly in either direction.