BTC price hits $ 50,000: 5 things to watch out for about Bitcoin this week

Bitcoin finally crossed the long-awaited $ 50,000 mark overnight on August 22. The price of Bitcoin (BTC) hits $ 50,000 again at the start of a new week.

After a strong weekend, Bitcoin finally crossed the long-awaited $ 50,000 mark overnight on August 22. Coupled with a firm sense of déjà vu, traders are naturally curious to know what will happen next, and especially if Bitcoin has bitten off more than it can chew with its latest price spike.

The annual summit of the United States Federal Reserve in Jackson Hole will take place this week, and macroeconomic factors could combine with internal sources of conflict to provoke a rough week for cryptocurrency markets.

Cointelegraph takes a look at five BTC price factors worth considering in the coming days.

Bitcoin Hitting $ 50,000: What Could Go Wrong?

There has been concern over the fact that Bitcoin failed to break the $ 50,000 mark this weekend. Everything from low volumes to a bearish Wyckoff distribution event was visible on social media by those who weren’t convinced of the market’s strength.

However, Bitcoin remained at the psychologically significant price level in a classical way. “If Btc can surpass this mark, people who trade excessively will lose their Btc and the hodlers will win,” summed up popular trader Pentoshi in one of his several tweets on Sunday.

“I said this one more time before I did a relentless 6x. Learn when to trade and when not to trade. All you have to do is do nothing. My strategy is to do nothing with references to the fourth quarter of 2020, hinting at similarities between what happens. ” Pentoshi channeled various the composition of the current market and the start of the last phase of Bitcoin’s bull run.

This “springboard” was also evident when the BTC / USD pair hit $ 50,000 for the first time in February, but it was slow to become firm support and provide the basis for a rise to the current all-time highs of $ 64,500.

As such, if the BTC / USD pair sees a new pullback, it will likely be fleeting, Pentoshi argues. “There probably won’t be much backtracking, if there is,” he added. “Right now everything is accumulation. When marking begins there is only vertical accumulation. “

Tapering Rumors Fly As Virtual Federal Reserve Summit Approaches

Macroeconomic clues are likely to come from the US Federal Reserve this week. It is rumored that the Jackson Hole annual meeting of the leading financial figures – now virtual – will focus extensively on the economic policy changes stemming from the Coronavirus pandemic.

In particular, markets will want to know if and when a reduction in asset purchases is expected. Analysts suggest that with this move planned, only something unexpected could destabilize markets. “They’re still very, very moderate. They are a little less moderate,” Garrett Melson, a purse strategist at Natixis Investment Managers Solutions, told Yahoo Finance last week.

But that’s a bit of semantics at this point. Tapering is very well documented and well known. We know it’s coming. It’s just a matter of time and it really shouldn’t surprise many investors. ” Stocks were already weakening at the end of last week thanks to tapering fears, and at the time of writing this article he had not yet started trading in the United States.

Gold, which suffered greatly this month as Bitcoin rallied, has regained much of the ground it recently lost. As Cointelegraph reported, gold lovers remain convinced that the precious metal will continue to attract long-term investment, while haven-seekers stay away from Bitcoin due to volatility.

Has China accelerated a maximum of the price of Bitcoin?

If the evolution of the spot price of Bitcoin has not impressed you, there is little debate about the strength of the fundamentals of its network. The hash rate and difficulty, months after a broad rally, outdid themselves over the past week. Compared to last Monday, the hash rate has gained 8 exahashes per second (EH / s), according to estimates, which equates to an overall increase of approximately 5% in computing power dedicated to mining.

At 121 EH / s, the hash rate is just 47 EH / s from the all-time highs reached before the China mining crash in May. “Bitcoin’s hash rate continues to rebound from one of the largest infrastructure displacements in modern history; approximately 45% of the billion-dollar Bitcoin mining industry has relocated to continents as the network continues normal “wrote the popular Twitter account Documenting Bitcoin last week.

“Bitcoin had zero downtime.”

Not only zero downtime, but also zero loss of demand: With the return of the power of hashing, difficulty settings have arrived, which have only served to strengthen network security and increase competition, all as planned. With this, the difficulty will increase for the third consecutive time in two days, this time around 9%, a maximum after China.

This is firmly bullish to the ears of those concerned about the profitability of mining in the long term, and also about the role that China has played in the functioning of Bitcoin. However, when comparing this year’s bullish streak to previous ones, one commentator highlighted a potential point of concern. “Around 120,000-138,000 blocks AFTER the capitulation of miners in each bear market, bitcoin has peaked,” Parabolic Trav noted on Sunday.

“The miners’ inventory accumulates 120,000-138,000 blocks (enough) (after they hold for a while) to crush the market. This exodus cycle from China forced inventory to market early. Implications? ” In case the China episode has accelerated the bull run this time, a potential second price spike could also come sooner than many anticipate. However, as Cointelegraph reported, theories hold that 2021 will mimic 2013 in producing a “double bubble” type BTC price cap with two spikes, the second of which will come by the end of the year or perhaps even more. late.

Exchange flows dominate again

On the subject of 2020 comparisons, for its part, there is another trend that clearly repeats the “springboard” of last year’s bull run. Exchanges’ Bitcoin reserves have fallen sharply in recent weeks after China temporarily reversed the overall downward trend.

While they showed mixed behavior throughout 2021, investors are now withdrawing BTC in amounts large enough for those withdrawals to dominate the landscape, notes on-chain analytics firm Glassnode. “Bitcoin flows from exchanges have once again dominated outflows through August as investors withdraw their BTC,” he revealed late last week.

“The market has gone through a number of phases of dominance of exchange flows in the last year, and dominance of outflows was last seen in late 2020.” This ties in with a popular narrative that focuses on accumulation at current price levels, suggesting overwhelming faith in higher prices yet to come.

“Extreme greed” increases your dominance

“Extreme” emotions are once again present among crypto investors. That’s according to the Cryptocurrency Fear and Greed Index, which this week is firmly within its “extreme greed” zone. Although it does not rise to the top of its 0-100 scale, the index is 79/100, just 15 points away from the typically bullish peaks that prevent major price corrections.

The rate of change of Fear and Greed has been intense: just three weeks ago, it was measuring 42/100, denoting that “fear” was the general emotion of the market. Monday’s reading is therefore the highest since mid-April, when Bitcoin was at its current all-time highs.


Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.

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