It's been a wild couple of weeks for bitcoin pricing. The cryptocurrency first broke through and then immediately sank beneath the psychologically important $10,000 barrier.

Although far from bitcoin's all-time-high, the so-called $10K barrier remains one of the cornerstones of the 2018 market. After the trouncing prices in general experienced following the astounding December 2017 run-up, bitcoin's $10K barrier has served as both a holy grail and a point of resistance for the market at large.¹ Since almost all altcoins hinge on the success or failure of bitcoin, the coin's activity around the $10K barrier is of interest throughout the cryptosphere. Let's have a look at the market conditions leading up to the $10K surge and what brought it down so suddenly afterward.

It's important to note that bitcoin has bounced to and just slightly past the $10K barrier several times so far this year, with each time representing a different mix of market dynamics. The most recent push in May, however, seemed to signal a lasting bull run. In that particular move past $10K, market watchers saw more than whale manipulation or a short-term reaction to news; it appeared like the barrier had been laid down as a platform for even more explosive growth.

After reaching a year-to-date high of around $17,000 in January, bitcoin coasted on a relatively even keel around the $11-12,000 mark before taking a sudden dip in late January. The coin ultimately settled around $6,500 in early February.

Since that nadir, bitcoin briefly flitted above the $10,000 mark until early March. It has remained in the single-digits since then, only briefly - and only on a few exchanges - breaking the $10K barrier.

Explanations for the glass ceiling bitcoin seems to be bumping against are many and varied. It's likely that no single explanation is entirely correct.

At least one camp points to the gradual decoupling of bitcoin from its alternatives. Relative to bitcoin, at least some altcoins have had an outstanding 2018 thus far.² While almost every coin suffered in the massive selloff that began in January, some of have regained most of their value in double- and even triple-digit runs. This mirrors the explosive growth of bitcoin itself in its early days, and some observers have pointed to the growing maturity of the cryptocurrency market as a potential factor allowing some altcoins to stand on their own.

Self-sufficient altcoins aren't necessarily a bad thing for bitcoin, as bitcoin provides the standard basis for trading pairs. But it does draw some new investment money away from the bitcoin standard. Instead of sinking money directly into bitcoin, some investors are opting to support projects that either purport to surpass bitcoin in some technological areas or promise the kind of rapid growth that bitcoin itself displayed in its early years.

Another camp drew parallels with earlier bitcoin runs, which seemed unstoppable at the time. Each factor cited in earlier runs, however, only grows stronger with time.³

The more often bitcoin crosses $10K, the more legitimacy it gains and the more likely it will attract institutional investors, who hold by far the largest chunk of wealth that could be made freely available for bitcoin, these folks argue.

As more money enters the bitcoin market, the coin gains greater adoption and greater legitimacy, creating a sort of feedback loop.

Furthermore, these bitcoin watchers argue, bitcoin has made several technological gains since February. The coin's Lightning Network aims to address its scalability problems, negating several high-profile altcoins that offer nothing more than bitcoin with better scalability.

Add to that the media hype surrounding bitcoin's psychologically important victories at $10K and a crystallization of U.S. regulatory policies, these watchers say, and that adds up to a bitcoin price that continues to accumulate value despite short-term blips.⁴

After all, as some observers point out, bitcoin has displayed outstanding growth over the long term, even if that growth has been more than a little uneven.

"To be fair, it took bitcoin 7 years to gain $10k in worth," wrote one forum participant. "Bitcoin then suddenly lost $10k worth in value over the period of a month."

This optimistic view of bitcoin's future as it dances around the $10K barrier isn't shared by everyone. While the majority of market watchers see flirtation with $10K as a hurdle to be jumped, some believe that $10K is establishing itself as a sort of fixed point, if not exactly a ceiling.

To these observers, moves past $10K represent market aberrations and the quick drop below $10K that bitcoin witnessed in May are evidence of this new normal. For these investors - an admitted minority - bitcoin will never reach a new all-time high.

"Everyone telling you to HODL (hold on for dear life), they're only looking out for their own interests. They're not going to tell you to sell, that would just drop the price down even further," said one forum user. "The prudent thing to do if you bought between $10-20K is to sell now and wait for all this to boil over. Now that $10K is the ceiling we are going to start flirting with $9K and then $8K and a massive sell will drop bitcoin even further. Do you want to wait till then until you have nothing left? Holding now is suicide."⁵

The user added that bitcoin has evolved to a point where just buying and holding is no longer a viable strategy, the same way it is not a viable strategy with many major stocks.

"Selling your BTC now is the safe and correct move. You're not weak if you sell. Think of selling as a strategy and don't buy into the BS that if you aren't HODLing somehow you have weak hands," the user wrote.

Bitcoin's relationship with the $10K barrier is complex, and only hindsight is likely to really clarify the issue. Bitcoin has indeed witnessed tremendous growth over its relatively short lifetime, and the $10K barrier is really the divider between optimists and pessimists.

Only a long-term stay above $10K is likely to sway the naysayers and bring in additional institutional investment. Ironically, it is this very same institutional investment that's likely to boost bitcoin over the $10K barrier in the first place.

As of mid-May 2018, bitcoin has not yet recovered from its speedy shot to $10K earlier in the month. Nor has it completely crashed, with prices at most major exchanges hovering between $8,400-8,700.

That can be interpreted in an equally valid way by both camps. Bitcoin's failure to recoup and shoot past $10K is evidence that the marker is now a ceiling, and we shouldn't expect much more from bitcoin in the future. On the other hand, bitcoin's failure to fall much off the mark is evidence of its staying power, and all bearish trends are relative. After all, some observers say, $10 per bitcoin was the old psychological ceiling before its dizzying rise.⁶

Ultimately, the cryptocurrency market is still too fresh to tell where bitcoin might be headed. If historical precedents are any real guide, bitcoin will likely consolidate a bit before making any leap upward. With so little history to go on, however, bitcoin's future price remains an open question.

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1) "Bitcoin (BTC) Price, Charts, Market Cap, and Other Metrics." CoinMarketCap.
https://coinmarketcap.com/currencies/bitcoin/

2) "$10K Test? bitcoin Price Hits 4-Week High As Altcoins Shine." CoinDesk. 23 Apr, 2018.
https://www.coindesk.com/testing-10k-bitcoin-price-hits-4-week-high-altcoins-shine/

3) "Bitcoin Is Facing Stiff Resistance On Road to $10K." CoinDesk. 25 Apr, 2018.
https://www.coindesk.com/bitcoin-faces-stiff-resistance-on-road-to-10k/

4) "7 Reasons The $10k bitcoin Bull Run Will Be Unstoppable." Crypto Briefing, 15 Feb, 2018.
https://cryptobriefing.com/7-reasons-10k-bitcoin-bull-run-will-unstoppable/

5) "When bitcoin Hit 10k the First Time vs Now." Reddit.
https://www.reddit.com/r/Bitcoin/comments/7uc64y/when_bitcoin_hit_10k_the_first_time_vs_now/

6) Pollock, Darryn. "Is It Ever Too Late to Buy bitcoin? $100 Then and Now." Cointelegraph. 14 May, 2018.
http://cointelegraph.com/news/is-it-ever-too-late-to-buy-bitcoin-100-then-and-now