A comparison between the $50,000 BTC price and the Fed-5 things to watch for Bitcoin this week


Bitcoin (Bitcoin) Back to $50,000, because the new week has begun.

After a strong weekend, Bitcoin Finally broke the long-awaited 50,000 USD mark Overnight on August 22.

With a firm consciousness Already seen, Traders are naturally curious about what will happen next-and crucially, whether Bitcoin has eroded it in the recent price surge.

With the holding of the annual Jackson Hole Summit of the US Federal Reserve this week, macro triggers may be combined with internal sources of controversy, triggering a busy week in the cryptocurrency market.

Cointelegraph studied five BTC price factors worth considering in the coming days.

50,000 USD Bitcoin: What could go wrong?

There is no shortage of worries about Bitcoin’s failure to exceed $50,000 this weekend.

Those who do not believe in market strength can see everything from low trading volumes to bearish Wyckoff distribution events on social media.

However, in this case, Bitcoin has cut and maintained an important psychological price level in a classic way.

“If btc can burst out from here. Over-trading people will lose their Btc, and hodlers will win,” Pentoshi, a popular trader Summary In one of the various tweets on Sunday.

“I said this before it went ruthlessly 6 times. Know when to trade and when not to trade. All you have to do is do nothing. My strategy is to do nothing when it happens .”

Pentoshi made various references to the fourth quarter of 2020, implying similarities between the current market composition and the beginning of the main phase of the latest Bitcoin bull market.

When BTC/USD reached $50,000 for the first time in February, this “springboard” was also obvious-but it will take time for this level to become a solid support and lay the foundation for reaching the current all-time high of $64,500.

Pentoshi believes that, therefore, if there is a new pullback in BTC/USD, it may be fleeting.

“If there is, I may not look back again,” he Add.

“Everything now is about accumulation. When the mark started, there was only vertical accumulation.”

BTC/USD 1-day candlestick chart (Bitstamp). Source: Transaction view

As the virtual Fed summit approaches, rumors are gradually decreasing

This week’s macro clues may all come from the Fed.

Rumor has it that Jackson Hole’s annual gathering of top financial figures (which will now be virtual) pays much attention to the economic policy changes caused by the coronavirus pandemic.

Specifically, the market wants to know if it is possible to reduce asset purchases and when it will happen.

Analysts said that given that this move has been digested to a certain extent, only unexpected things will cause market turmoil.

“They are still very, very dovish. They are a little less dovish,” said Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions. Tell Yahoo! Finance last week.

“But it’s a bit semantic at this point. Taper is 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.”

Stock is Has weakened At the end of last week, the US had not yet started trading at the time of writing due to the waning concerns.

Gold suffered heavy losses this month while Bitcoin soared, while making up most of its recent losses.

As Cointelegraph Report, The gold bug still believes that precious metals will continue to attract long-term investment, and safe-haven seekers stay away from Bitcoin due to volatility.

Has China accelerated the peak of Bitcoin prices?

If Bitcoin spot price movements fail to impress you, there is little controversy about the strength of its network fundamentals.

Hash rate and difficulty, after months of extensive recovery, have surpassed themselves in the past week.

Compared to last Monday, the hash rate has Add 8 exahashes (EH/s) per second, estimated Show, Which is equivalent to an overall increase of about 5% in computing power dedicated to mining.

Therefore, the computing power is 121 EH/s, which is only 47 EH/s away from the historical high before China’s mining crash in May.

“Bitcoin hash rate is continuing to recover from one of the largest infrastructure migrations in modern history-approximately 45% of the Bitcoin mining industry, billions of dollars, repositioning the continent as the network continues to function normally,” popular Twitter account records Bitcoin Wrote Last week.

“Bitcoin has zero downtime.”

Bitcoin difficulty chart. Source: Blockchain

Not only is there zero downtime, but also zero demand loss-with the return of computing power, difficulty adjustments will follow. This will only strengthen network security and increase competition. Everything is going according to plan.

In this way, the difficulty will increase for the third time in a row in two days, this time About 9% — Post-China high point.

For those who are worried about long-term confidence in mining profitability and China’s role in Bitcoin operations, this is undoubtedly good news.

However, comparing the bull market after this year’s halving with the previous bull market, one commentator highlighted a potential point of concern.

“After miners surrender in each bear market, there are about 120k-138k blocks, and Bitcoin has peaked,” Parabolic Trav Noticed Sunday.

“120k-138k blocks have built enough miners’ inventory (after they have hoarded for a period of time) to overwhelm the market. This cycle of outflows from China has forced stocks to be listed early. Impact?”

If this Chinese event accelerates the bull market, then the potential second price peak may also be earlier than many people expected. As Cointelegraph ReportHowever, it is theorized that 2021 will imitate the “double bubble” BTC price top that occurred in 2013 Two peaks, The second time came at the end of the year or even later.

Foreign exchange flows back to dominance

At the same time, on the topic of comparison in 2020, there is another trend that clearly repeats the “springboard” of last year’s bull market.

After China temporarily reversed its overall downward trend, Bitcoin foreign exchange reserves have fallen sharply in recent weeks.

On-chain analytics company Glassnode pointed out that although it showed mixed behavior throughout 2021, investors are now withdrawing BTC in a large enough amount, and these withdrawals will dominate the market.

“As investors withdrew from BTC, Bitcoin transaction flow has returned to dominance of outflows in August,” it Reveal Later last week.

“In the past year, the market has experienced multiple stages of dominance in foreign exchange flows, and the last time outflow dominance appeared was at the end of 2020.”

This with a Popular narrative Focusing on the accumulation of current price levels shows confidence in higher prices in the future.

Annotated chart of Bitcoin exchange balance changes.Source: Glassnode/Twitter

“Extreme greed” enhances its grip

“Extreme” sentiment has returned to the vision of cryptocurrency investors.

That is based on Crypto Fear and Greed Index, Firmly in its “extreme greed” zone this week.

Related: Top 5 cryptocurrencies worth watching this week: BTC, ADA, AVAX, CAKE, ATOM

Although not fully at the top of the 0-100 range, the index now measures 79/100, which is only 15 points away from the usual bullish peak, which excludes major price adjustments.

Fear and greed change very quickly-just three weeks ago, its index was 42/100, indicating that “fear” is the overall market sentiment.

Therefore, Monday’s reading is the highest level since mid-April, when Bitcoin was at its current all-time high.

Crypto Fear and Greed Index. Source: Alternative.me