Bitcoin’s price recently broke above the $50,000 psychological support level for the first time in 100 days, but it failed to hold. This could be a lack of buying pressure due to the already extended rally from $28,000 to $50,000 and beyond.
In the August 22 trading session, bitcoin finally climbs above $50,000 This is the first time in three months that BTC has managed to break through this psychological barrier. Unfortunately, the joy above $50K was only fleeting as the market’s leading crypto quickly retreated below this resistance line.
Why didn’t the breakthrough last long?
Crypto experts are unanimous in pointing to low trading volume on Bitcoin as the main reason why the crypto failed to break above the $50K mark. Indeed, for the past few days, the trading volume on BTC has not moved too much. It has been stabilizing between $25-40 billion for almost 21 sessions. For the one yesterday, the trading volume closed at $34 billion. For the day bitcoin attacked $50,000, the volume was only $25 billion.
Yet there was no shortage of buy alerts. First, Coinbase’s announcement to invest another $500 million on cryptos. Then, during the previous week, one of the oldest banks in the United States, Wells Fargo and JP Morgan, along with New York Digital Investment Group made it known that they planned to create a crypto fund for its wealthiest clients. Lastly, the weekly MACD is above the signal line after 11 months.
“The last time the MACD crossed the signal line, the price of bitcoin had increased 5.5 times from $11,500 in October 2020 to $64,500,” a Cointelegraph reporter revealed. If this were to happen again, we should be at one BTC for $225,000 by next year.
Despite the fact that the Bitcoin price has risen 72% in the last 30 days, the value of Bitcoin futures has remained almost stable. While the overall structure remains bullish, BTC will likely return to the sloping trendline connecting the August 6 and 19 swing lows at around $47,800 or return to the stable support level of $46,000.
Either way, BTC will turn bullish once it produces a decisive 12-hour candlestick close above $50,958 and paves the way for the resistance barriers at $55,210 and $56,670.