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Psychology, Sell Pressures Keep Bitcoin Below $20K

Psychology and selling pressures have kept bitcoin's price below $20,000.

Updated Sep 14, 2021, 10:38 a.m. Published Dec 4, 2020, 9:29 p.m.
Why hasn't bitcoin's price passed $20,000? Some may find this frustrating.
Why hasn't bitcoin's price passed $20,000? Some may find this frustrating.

Less than a week ago, bitcoin’s price set a new all-time high at $19,920.53. However, the oldest cryptocurrency is still struggling to break above the $20,000 level.

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The reason that milestone remains elusive, according to analysts and traders, is simple: There are too many sell orders very near the $20,000 level because some bitcoin holders are afraid of near-term sell-offs. That price point is particularly significant because it’s roughly where the market topped out in the late 2017 rally that saw bitcoin quadruple in price within two months, only to collapse by 70% within the subsequent two months, its biggest (at the time) price correction.

“A huge [number] of sellers are offering orders near the $20,000 level, which has no doubt created a strong resistance level,” Simons Chen, executive director of investment and trading at Hong Kong-based crypto lender Babel Finance, said. “People are trying to sell at this level based on what happened during the 2017 bull market.”

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Bitcoin prices versus trading volumes.
Bitcoin prices versus trading volumes.

For some, similarities to 2017 are hard to ignore, particularly the speed by which bitcoin made new record prices.

The $20,000 level "is like psychological warfare for many,” said Lingxiao Yang, chief operating officer at crypto quant firm Trade Terminal. “It only took about a month for bitcoin to go up from around $14,000 to the new all-time high.”

But Yang also said that this emotional element has largely been reflected on the retail investors' side, while more institutions are in the "buy the dip" mindset.

Market fundamentals are also weighing on bitcoin. Data from crypto analytics site CryptoQuant indicate major bitcoin holders, or whales, have not been withdrawing bitcoin from exchanges.

Decreased bitcoin outflow from exchanges indicates fewer bitcoin whales are withdrawing their bitcoins.
Decreased bitcoin outflow from exchanges indicates fewer bitcoin whales are withdrawing their bitcoins.

“The fact that whales don’t withdraw means that BTC is available for selling,” Ki Young Jun, chief executive officer of CryptoQuant said in a tweet. “If whales think the price will go up, they’ll withdraw BTC a lot.”

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Further evidence of increased selling pressure near $20,000 is that a growing number of “wrapped” bitcoin have been “unwrapped” from the cooling decentralized finance (DeFi), according to Denis Vinokourov, head of research at Bequant.

When the Ethereum-based DeFi space was garnering all the attention in the past summer, bitcoins were tokenized (or “wrapped”) on Ethereum. At one point there were more bitcoins being wrapped on Ethereum than bitcoins being created by bitcoin miners. To some extent, that may have been simply because bitcoin’s price was doing reasonably well over the summer, more than doubling from its March 17 sell-off low of $3,867.09.

“It is worth remembering that the initial minting was done at much lower absolute [pricing] levels, and taking some profit and locking assets in the future makes sense from a prudency standpoint,” Vinokourov said.

Read more: Bitcoin Price Could Hit $50K in 2021, Bloomberg Analysts Say

On the buy side, the new bitcoin investors may be “agnostic” regarding exactly where they are purchasing in the range between $15,000 and 20,000, according to Vishal Shah, founder of derivatives exchange Alpha5.

Buyers "are not concerned about the next 300 or 400 points, or even 1,000 points,” Shah said. “It's about the trajectory of things.”

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CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.

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Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.

  • Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
  • Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions. 
  • Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.

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