Bitcoin failed to break
Bitcoin failed to break the $50,000 price tag during weekend trading and is beginning to flag signs of profit-taking in the short term.
The world’s largest crypto by market cap is down 2.5% over 24 hours and is currently changing hands for around $45,892.
Still, bitcoin (BTC, -0.74%) is up 56% in year-to-date returns courtesy of a strong showing by bullish traders throughout the first half of August which saw prices rise from $38,000 on Aug. 4 to around $48,190 on Saturday.
“The price has rebounded strongly now, but this upward move is showing some signs of short-term fatigue,” said Simon Peters, market analyst at trading platform eToro. “We could see a small retracement down to lower prices before the prevailing trend reasserts itself.”
Low levels of daily trading volume persist as bitcoin struggles to edge higher while short positions are building, according to Datamish data, pointing toward a return to lower supports near $44,000.
“Even though the trend has flipped bullish, a pullback is to be expected before continuation,” said Marcus Sotiriou, sales trader at U.K.-based digital asset brokerage firm GlobalBlock. “This is because there has been declining volume with a price increase, as well as a bearish divergence in the RSI indicator on the daily time frame.”
Bitcoin traded in a choppy range on Monday as buyers appear to be exhausted ahead of the $50,000 resistance level. The cryptocurrency was trading at around $46,000 at press time and is roughly flat over the past 24 hours.
On Monday, the total crypto market cap surpassed $2 trillion for the first time since mid-May, according to CoinMarketCap data. Ether and Cardano are standouts in the recent crypto rally, with strong rallies month to date, rising 26% and 62% respectively, compared with a 16% rise in bitcoin during the same period. XRP is also up 70% so far this month.
The rapid rise in crypto prices has some analysts expecting a pause. Katie Stockton, managing director of Fairlead Strategies, highlighted signs of upside exhaustion in bitcoin in her Monday newsletter.
Upside exhaustion signals could “support a brief period of consolidation as gains are digested and short-term overbought conditions are relieved,” Stockton wrote.
“Even though the trend has flipped bullish, a pullback is to be expected before continuation. This is because there has been declining volume with a price increase,” Marcus Sotiriou, a trader at the U.K.-based digital-asset broker GlobalBlock.
Bitcoin mining reserves rise
Bitcoin miners have added more of the cryptocurrency to their reserves in the past few weeks.
“The reserves are now close to this year’s all-time high of May 9, recovering the outflows in June,” Jan Wuestenfeld, an analyst at blockchain analysis firm CryptoQuant, wrote in a blog post.
Miners “appear to be unimpressed by the most recent price moves (likely expecting higher prices),” Wuestenfeld wrote. “The fact that miners are not under pressure to sell their BTC at these prices is a testament to the health and resilience of the miners and the network.”
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