Bitcoin stalls below crucial $87.000 threshold

Bitcoin’s price has pulled back slightly in recent days, but the correction remains limited for now. Even so, investors are starting to worry about the absence of a convincing breakout above the $87.000 mark. The fact that the largest cryptocurrency has been rejected at the same level several times suggests buyers are struggling to build enough momentum to push through to $90.000.

Tailwind

Yet Bitcoin did receive support from recent US labour market data. The figures came in weaker than expected, further reducing the odds of another rate hike by the Federal Reserve. Normally that is favourable for risk assets such as equities and cryptocurrencies. Despite this tailwind, however, Bitcoin failed to break convincingly above $87.000.

At the same time, competition from traditional financial markets remains fierce. The yield on the US 10-year Treasury is hovering around 5.3%, a level not seen since 2002. The US dollar is holding up well too. As a result, investors still have attractive, relatively risk-free alternatives at their disposal, which is dampening demand for Bitcoin.

According to Alex Kuptsikevich, market analyst at FxPro, the bulls currently lack conviction. He points out that Bitcoin is moving ever closer to the end of a technical triangle pattern. That pattern is formed by a rising support line at the bottom and horizontal resistance around $87.000. When such a formation is eventually broken, a powerful price move often follows.