Bitcoin made a reversal but failed to implement a bullish momentum: what will happen to cryptocurrency in the near future

Bitcoin continues to reap the rewards of a failed attempt to consolidate above $51,500. On August 25, the cryptocurrency declined amid strong market pressure but found a local support zone at $47,000. After that, bitcoin tried to implement the bullish momentum, but the coin failed to overcome the difficult sell zone above $49,000 and began to decline again. As of 11:00 UTC, BTC is trading in the $46,800 region and is trying to jump to the $48,000 support level, but everything indicates that bitcoin will finally fail the reversal to $51,000.

It is worth noting the reasons why bitcoin failed to test the $51,500. First of all, it is worth highlighting the clear discrepancy between the average indicators of Daily Active Addresses and Active Addresses (24h) and the real cost of bitcoin. At the same time, the total amount of transactions in the cryptocurrency network remained at an all-time low, which was an alarming signal and provoked numerous bearish divergences on the technical indicators of the cryptocurrency. In addition, the 30-day MVRV is in the +10% area, which indicates the likelihood of massive profit-taking, which provides the bears with additional opportunities to push the price down. In addition, do not forget that as of August 25, bitcoin is still in a bearish trend, and therefore any corrective structures will worsen as there is no sufficient reason for growth. It was the combination of these factors that prevented BTC from making a local bullish reversal and re-entering $51,500.

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To start a full-fledged bull market, bitcoin needs to successfully consolidate above $51,000, but right now the coin is much closer to a downward movement. The asset worsened its position, failing to realize the bullish impulse of buyers, who pushed the price away from $47,000. Therefore, the coin continues to fluctuate along the upward support line. However, as of 11:00 UTC, the technical indicators on the 4-hour BTC chart indicate a bearish breakout of this line. The RSI is at 40 and the MACD is in the red. Stochastic has dipped beyond the zero mark and signals a bearish divergence.

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On the daily chart, bitcoin continues to show clear weakening and preconditions for a downward movement. If today, August 26, the coin breaks the upward support line, then the bears will try to push the price to the key support zone in the current range of the local bullish trend of $42,500. At the same time, one should not discount powerful buyers who are already able to buy back the fall in cryptocurrency. In addition, the $42,000- $44,000 area is an area of concentration of longs and buy options, which also increases the chances of a rebound and a subsequent attempt to implement a bullish momentum. However, in the event of a bearish breakout and worsening of the current correction, the first strong support zone will be the $45,500 mark.

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The correction will likely end in the $42,000-$44,000 range, where the powerful buyer levels the bearish pressure. Despite the weak on-chain indicators, the market is set for growth, and therefore both large and small investors will take advantage of the favorable moment and enter the asset thanks to the current correction. The news background has finally returned to normal and the cryptocurrency market is again receiving a sufficient amount of investment from large companies. BTC's main "client" MicroStrategy invested another $177 million in the asset, which also pushed off $47,000.

However, two things can spoil the life of bitcoin. First, a bearish breakdown of the upward support line will slow down the movement of the cryptocurrency to $51,000 and may provoke the emergence of additional corrective structures and pressure zones. The second factor which can negatively affect the BTC/USDT quotes is the suspicious activity of a narrow circle of large cryptocurrency holders. More than $12 billion in BTC was recently transferred to the crypto exchange, which could provoke a "pump" and a subsequent painful fall. A similar situation happened today, August 26, when it became known that an unknown whale transferred more than 23,000 BTC to Huobi. It is not yet clear how dangerous such manipulations are for individual coins, but soon the entire market will experience the results of huge coin transfers.




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Artem Petrenko
Analytical expert of InstaForex
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