Bitcoin Attempts to Break Above $50K as Fundamentals Remain Robust
Bitcoin (BTC) is about to attempt its second assault on key barrier this week, as bulls maintain a strong grip on the market. After a volatile weekend that witnessed a charge on $48,000 and a significant reversal at that level, Bitcoin is now back, having recovered all of its setbacks.
With circumstances generally positive for further gains, it may only be a question of how long until the next impulsive move redefines the BTC/USD spot market. When predicting where Bitcoin will go in the next few days, there are five variables to consider.
This weekend saw another round of eyebrow raising move from Bitcoin. Saturday started on a strong note, with BTC/USD breaking over $47,000, a level that instantly borders a huge barrier that stood firm. Following that, an unsuccessful assault on that zone resulted in a dramatic downturn, with Bitcoin falling to a low of $45,500 before rebounding.
That rebound, which lasted all through Sunday, eventually returned Bitcoin to where it had started the weekend’s activity, and Monday’s picture gives traders a strong feeling of déjà vu. “Bitcoin needs to recover $46.5K,” Cointelegraph writer Michael van de Poppe predicted before the current surge was verified. “If that occurs, I expect the highs to be challenged again. If not, $44K will be next.”
Despite the fact that a rerun is now possible, sellers remain firm at $48,000. A check at the buy and sell levels on the main exchange Binance reveals the magnitude of the opposition, with support around $45,000 now very significant. In the meantime, Rekt Capital, a fellow trader and analyst, saw BTC/USD as a rising triangular formation, with Sunday offering a trial of its upper limit but no breakout.
On Monday, he tweeted, “BTC has established a fresh Lower High on its most latest successful retest effort.” “Has $BTC now settled into its present market structure?” Here’s some excellent info from a well-known outlet: Bitcoin network fundamentals continue to rise toward historical peaks. After the most recent automatic realignment on Friday, mining complexity increased by 7.3%, marking its best showing since Bitcoin’s price drop in May.
#Bitcoin needs to regain $46.5K.
If that happens, then I'm assuming the highs will be tested again.
If not, $44K next. pic.twitter.com/hz9rrK2qlt
— Michaël van de Poppe (@CryptoMichNL) August 15, 2021
Interestingly, after getting pushed out of China, mining power is reverting to Bitcoin, while prevailing miners are boosting their capacities. As a consequence, the Bitcoin mining hash rateis on the rise, as does competitive rivalry for the Bitcoin block reward, causing complexity to rise in order to maintain the infrastructure in balance.
$BTC orderbook update
Timestamp: 2021-08-16 06:04:10.449531
Next update in ~2h
— Material Indicators (@MI_Algos) August 16, 2021
This improves network security and emphasizes miners’ long-term commitment to Bitcoin — investment in exchange for rewards. On Monday, the hash rate was 113 exahashes per second (EH/s), far over the 100 EH/s threshold and 30 EH/s higher than the post-May low points.
As per the tracking site MiningPoolStats, the historical peak for the hash rate before the China incident was 168 EH/s. This week, positive factors are expected to contribute to Bitcoin’s gains from the broader economic environment.
#BTC has formed a new Lower High on this most recent successful retest attempt
— Rekt Capital (@rektcapital) August 16, 2021
Following a difficult finish to the week for the US dollar, Monday has till now provided just a little turnaround. This weekend marked the 50th anniversary of the United States’ decision to abolish the dollar’s peg to gold. While dollar weakening is not an assurance for quick gains for Bitcoin, it is nevertheless a helpful indication of the crypto market’s possibility. The US dollar currency index (DXY) was at 92.6 while writing this article, a decrease from above 93 last week.
Justin d’Anethan, head of exchange sales at Nasdaq-listed crypto company EQONEX, underlined in a market overview that a declining dollar has the capacity to boost the value of hedging assets such as gold too. “One might also see the dollar dropping, boosting risk assets as well as gold, which is attempting to rebound,” he wrote on Monday. “You can sense the bullishness in the crypto sector as well; investors are much more wealthier today than they were in the past week or the week earlier to that.”
D’Anethan was also optimistic about a further macro trigger from the US government in the shape of the controversial framework bill’s crypto tax wording being modified in the short-future. “If a more liberal phrasing can be approved, this would be extremely helpful,” he said. Market mood, which is already dabbling with “extremes,” provides a minor contrast to the need for prolonged positive momentum on Bitcoin. These take the shape of the Cryptocurrency Fear & Greed Index, which posted its top score in four months in the past few days.
#Bitcoin difficulty adjusted +7.3% this morning as hashpower starts coming back online (having left China)
— Alistair Milne (@alistairmilne) August 13, 2021
The Index, which uses a variety of variables to assess if cryptocurrency in general is undervalued or, alternatively, due for liquidation at certain levels, hit 76/100 on Sunday, equating to “extreme greed.” In comparison, it recorded 10/100 only a month ago – the exact reverse of today, or “intense paranoia.” A possible additional assault on $50,000 for Bitcoin may therefore upend mood once again, raising the possibility of a knee-jerk drop as the market approaches its all-time peaks in April.
Furthermore, one cryptocurrency’s loss is another token’s gain, and it seems that altcoins will be the major benefactors of current mindset. Despite the fact that Bitcoin is up about 8% from a week ago, prominent altcoins are outpacing it. Several of the top 50 cryptos by market capitalization have experienced weekly gains of over of 20%, with Solana (SOL) topping the pack with a gain of 60% on Monday.
1/ Traditional markets finished last week on a risk-on note, investors were bolstered by reassuring #inflation data and ignored the jobs #data which showed a decline but was broadly in line with expectations.https://t.co/mbC0eeJBch
— Justin d'Anethan (@justindanethan) August 16, 2021
Expectations are strong that some kind of “alt season” will emerge this summer, perhaps fueled by a revival of decentralized money. Notwithstanding its impressive success, Bitcoin’s market cap dominance is also declining at 43.7 percent, leaving the door for altcoins to take the headway in Q4.