Bitcoin (Bitcoin) Reached the highest level in more than two months, only a few days before the July inflation report.
On August 8, the top cryptocurrency rose by 1.65% to $45,363, continuing its upward momentum of 21.62% from the August 5 low of $37,300.
The momentum of Bitcoin’s competitors is also very strong. Ether (Ethereum) Is the second largest cryptocurrency by market capitalization, up 29.78% from the low of $2,630 on August 3. More than 3,100 USD on Sunday. Its gains came after Ethereum’s London hard fork went live on August 5th, which should increase deflationary pressure on the supply of ETH.
July inflation report, on-chain
On Wednesday, August 11, the U.S. Bureau of Labor Statistics will release its July inflation report, which includes Market forecast to rise 0.5%These forecasts came after the Consumer Price Index (CPI) rose 5.4% year-on-year in June, the largest increase in 13 years.
Bitcoin bulls have Positive response The most recent inflation report. After the crash on May 19, they effectively prevented the cryptocurrency from falling below $30,000. At the same time, their recent efforts to push the price above $40,000, eventually leading to a slow upward breakthrough above $45,000, indicating that the demand for Bitcoin is strong and seems to be emerging from the summer downturn.
Lex Moskovski, Chief Investment Officer of Moskovski Capital, highlighted the Glassnode chart, which shows a sharp increase in the number of entities entering the Bitcoin network, matching the rise in the BTC/USD exchange rate.
“The number of new Bitcoin entities continues to hit record highs,” Moskovsky Tweet.
In addition, on-chain analyst Willy Woo stated that the continued momentum of Bitcoin should push its price above $50,000, citing the imbalance between supply and demand in the market.He said all Investor groups are buying Bitcoin, Resulting in supply shocks.
Woo mentioned a chart he published on July 15 when the Bitcoin market was pulling back after reaching a peak of $36,675 during the trading session. As shown in the figure below, this figure highlights the Bitcoin liquidity shock events of all exchanges and their relationship with prices.
“The fundamentals cannot predict short-term prices, but if there is enough time, price discovery will return to fundamentals. [The] Today’s exact value is $53,200, and the standard deviation ranges from $39,600 to $66,800 (68.5% confidence level). “
However, based on the previous top-down Fibonacci retracement fractal, the latest Bitcoin rise does have the risk of becoming a dead cat rebound.
After hitting a new all-time high, Bitcoin tended to correct towards its 200-week exponential moving average (200-week EMA; yellow wave), and finally bottomed out in pursuit of another bullish cycle.
In the past two events, the BTC/USD exchange rate experienced a false recovery rebound after testing the 23.6 Fibonacci line as support. After facing resistance from the higher Fib level, these upward movements failed to turn into a huge bullish momentum.
For example, in 2019, Bitcoin rebounded from the 23.6 Fib line near $7,357 and rebounded by more than 50%. However, the cryptocurrency is facing extreme selling pressure near its 61.8 Fib line of $10,613. Eventually, it resumed its downtrend and fell to a low of $3,858 in March 2020.
If the fractal repeats itself, Bitcoin may face extreme resistance of $46,792 at the 61.8 Fibonacci level and revise downwards to retest its 200-day moving average, which is currently below $20,000.
Independent market commentator and trader Keith Wareing stated that the impending bullish crossover between Bitcoin’s two weekly moving averages hints at the beginning of a multi-month bull market. This indicator is called MACD and helps predict the 2020 bull market.
“After the market closes tonight, the weekly MACD will cross bullish Bitcoin,” think At the time of writing, the price of Bitcoin has remained above $44,500 so far.
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