Bitcoin Teeters on $10K, But Can It Fend Off Another Bear?

Bitcoin's recent market movements have thrown into contention consensus about its short-term price direction, with traders asking openly if demand is strong enough to fend off another bear market.

Such a question has emerged in the wake of the world's largest cryptocurrency's inability to set new highs above those seen in June and July, when optimism about a Facebook cryptocurrency launch pushed the price of bitcoin to $13,880 and $13,200 on June 26 and July 10, respectively.

Bitcoin has largely failed to test these highs again, prompting speculation traders may be willing to push the market into a lower range, one that could be deepened by available futures options.

Investors will see the amount of new bitcoin introduced to the market daily cut in half, with each new block in the blockchain producing 6.25 BTC, down from 12.5 BTC. As can be seen by the recent litecoin halving, events that increase the perceived scarcity of cryptocurrencies have proven to catalyze buying interest.

Bitcoin looks attractive to large hedge fund managers seeking to offset risk in traditional markets.

Analyzing the cryptocurrency markets remains an evolving science, but new metrics suggest that bitcoin may currently be priced favorably ahead of the halving event.

It helps illustrate how leading analysts believe miner selling pressure affects the price of bitcoin.

The above chart shows bitcoin's "Network difficulty," a function of how hard the software makes it to discover a new block and thus claim the new cryptocurrency it releases to the market.

"The timing of the last difficulty ribbon compression is very bullish, especially given we expect another compression at the halving, I don't think we have time to come into a bear season before then."

Still, prices have held above $10,000 by the end of each daily closing period for nearly 30 days, suggesting that demand for bitcoin below that mark remains strong.