Bitcoin price analysis (23–29 August): can the rally continue?
Bitcoin is at a critical juncture that will decide its short-term course
Bitcoin’s sharp recovery has pushed the price above $50,000 for the first time since 15 May. The rally has been buoyed by news of greater institutional adoption.
Wells Fargo and JPMorgan filed applications with the US Securities and Exchange Commission (SEC) on 19 August to launch bitcoin funds in partnership with the New York Digital Investment Group. Both banks will receive an undisclosed percentage of fees for sales of the product.
Another legacy investment giant that is bullish on crypto is Fidelity. In a recent interview with the Boston Globe, Tom Jessop, president of the digital-asset business unit at Fidelity, said: “What really got people off the fence was the pandemic, because you’ve got this scarce asset class – there will only ever be 21 million bitcoin created – and an environment where our currency is being debased, and there’s a tonne of money printing.”
The interest surged further with the entry of high-profile investors such as billionaire Stanley Druckenmiller and hedge fund manager Paul Tudor Jones into the crypto space.
In another boost to cryptocurrencies, Coinbase co-founder and CEO Brian Armstrong recently announced the company will add $500 million of crypto to the existing holdings. For the future, the exchange plans to invest 10% of its profits into crypto, with an expectation of increasing the percentage over time.
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Can bulls sustain the momentum and extend bitcoin’s recovery further? Read our bitcoin price trend analysis to find out.
Bitcoin price technical analysis: weekly chart
Bitcoin’s price rallied 4.84% last week to end at $49,285.90. This was the fifth consecutive week the price had closed in the green, indicating strong buying by the bulls.
The 20-day exponential moving average (EMA) has turned up and the relative strength index (RSI) has risen into positive territory, indicating that the bulls are in control. The BTC/USD pair could now rally to the next target objective, set at $60,000.
However, the rise from current levels is unlikely to be easy, as the bears will try to stall the upwards move at the 61.8% Fibonacci retracement level at $51,047.91. If the price turns down from this level, the pair could drop to the 20-week EMA.
A strong rebound off this support will suggest that sentiment remains positive and traders are buying on dips. Alternatively, if the price slips below the 20-week EMA, it will indicate that the bulls are losing their grip.
What is your sentiment on BTC/USD?
The Bitcoin price weekly analysis shows that bulls remain in command. Will the rally continue its march toward $60,000, or is it time to book profits? Read on for our daily price analysis.
Bitcoin price technical analysis: daily chart
The bears tried to stall the rally in bitcoin’s price near $50,000 on 21 August, but the bulls were in no mood to relent. They purchased the minor dip on 22 August and have pushed the price above $50,000 today.
However, the bears are unlikely to give up, and will likely try again to mount a stiff resistance at $51,599.95.
If the price turns down from this level, the pair could drop to the 20-day EMA. A strong bounce off it will suggest strength, and the bulls will then make one more attempt to clear the hurdle at $51,599.95.
If they succeed, the pair could pick up momentum and rally to $60,000. The upsloping moving averages and the RSI near the overbought zone indicate the path of least resistance is to the upside.
This positive view will invalidate if the price turns down from the current level and breaks below $43,939.45.
How to trade bitcoin this week
Bitcoin has cleared the hurdle at $50,000 – therefore, if the bulls can push the price above $51,599.95, the uptrend could pick up momentum. The next target objective on the upside is $60,000.
Conversely, if the price turns down from the current level or the overhead resistance, a drop to the 20-day EMA is possible. This is an important level to watch out for because if it cracks, the pair could drop to $43,939.45.
The views and opinions expressed in the article are those of the author, and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial advisor before arriving at a decision.
