$ 50,000 BTC Price Against The Fed – 5 Things To Watch Out For In Bitcoin This Week

Bitcoin (BTC) is back at $ 50,000 as a new week begins with a bang.

After a strong weekend, Bitcoin finally broke the long-awaited $ 50,000 mark on the night of August 22.

With a keen sense of already seen, traders are understandably curious about what will happen next – and especially whether Bitcoin has bitten off more than it can chew with its latest price spike.

With the US Federal Reserve’s annual Jackson Hole summit scheduled for this week, macro triggers could combine with internal sources of contention to trigger a turbulent week for the cryptocurrency markets.

Cointelegraph takes a look at five BTC price factors to consider in the coming days.

$ 50,000 Bitcoin: What Could Go Wrong?

There was no lack of concern that Bitcoin failed to crack $ 50,000 this weekend.

Everything from low volumes to a bearish Wyckoff distribution event was visible on social media to those unconvinced of the strength of the market.

In this case, however, Bitcoin has clipped and maintained the psychologically significant price level in the classic way.

“If btc can get out of here. People who trade will lose their Btc and hodlers will win, ”popular trader Pentoshi abstract in one of the various Sunday tweets.

“I said it another time before he did a relentless 6x. Know when to trade and when not to trade. All you have to do is do nothing. My strategy is to do nothing when this happens.

Pentoshi channeled various references to Q4 2020, hinting at similarities between the current makeup of the market and the start of the main phase of Bitcoin’s latest bull run.

This ‘stepping stone’ was also evident when BTC / USD first hit $ 50,000 in February – but it took time for the level to become firm support and form the basis for a trip to current historic highs. of $ 64,500.

As such, if BTC / USD experiences a further decline, it will likely be short-lived, Pentoshi claims.

“There probably won’t be much to look back on,” he said. added.

“Right now, it’s all about accumulation. When the markup begins, there is only vertical accumulation.

Fading rumors fly as the Fed’s virtual summit approaches

The macroeconomic indices will likely all come from the US Fed this week.

Rumor has it that the annual Jackson Hole gathering of top financial figures – now virtual – is largely focused on changes in economic policy stemming from the coronavirus pandemic.

Specifically, markets will want to know if and when a reduction in asset purchases is being considered.

With such a move integrated to some extent, only something unexpected could spin the markets, analysts suggest.

“They are always very, very accommodating. They’re a little less accommodating, “Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions, told Yahoo! Finance last week.

“But it’s a bit of semantics at this point. Typing is very well documented and well known. We know it happens. It’s just a matter of timing and it really shouldn’t come as a surprise to many investors.

Shares were already weakening at the end of last week thanks to fading fears as the start of trading in the United States had yet to take place at the time of writing.

Gold, which has suffered a lot this month as Bitcoin has surged, has meanwhile made up much of its recently lost ground.

As Cointelegraph reported, the gold bugs remain convinced that the precious metal will continue to attract long-term investment, with safe-haven seekers staying away from Bitcoin due to volatility.

Has China accelerated a Bitcoin price peak?

If Bitcoin’s spot price action has failed to impress you, there is little debate about the strength of its network fundamentals.

The hash rate and difficulty, months after a large rally, have outsmarted each other over the past week.

Compared to last Monday, the hash rate added an estimated 8 exahashs per second (EH / s), which equates to an overall increase of about 5% in computing power dedicated to mining.

At 121 EH / s, the hash rate is therefore only 47 EH / s from the all-time highs seen before the Chinese mining rout set in in May.

The Bitcoin hash rate continues to recover after one of the biggest infrastructure shifts in modern history – with around 45% of Bitcoin mining, billions of dollars, continents relocating as the network was proceeding normally, “popular Documenting Bitcoin Twitter account wrote Last week.

“Bitcoin has had no downtime.”

Not only no downtime, but no loss of demand – with the return of hashing power, difficulty adjustments were made, which only served to strengthen network security and increase competition, as expected.

With that, the difficulty is expected to increase for a third time in a row in two days, this time by around 9% – a high after China.

This is firmly bullish in the ears of those worried about long-term confidence in mining profitability, and also the role China has played in making Bitcoin work.

However, in comparing the running of the bulls after this year’s halving to previous ones, one commentator pointed to a potential area of ​​concern.

“About 120,000 to 138,000 blocks AFTER the trough of miners’ capitulation in each bear market, bitcoin peaked,” Parabolic Trav Noted Sunday.

“120,000 to 138,000 blocks is enough inventory for miners (after hanging around for a while) to crush the market. This cycle of exodus from China forced stocks to hit the market earlier. Consequences ? “

If the Chinese episode had accelerated the bull run this time around, a potential second price spike could also come sooner than expected. As Cointelegraph reported, however, theories argue that 2021 will mimic 2013 by producing a ‘double bubble’ type BTC price with two peaks, with the second coming at the end of the year or maybe even later.

Trade flows become dominant again

When it comes to 2020 comparisons, there is another trend that clearly repeats the “springboard” of last year’s bull run.

Bitcoin’s foreign exchange reserves have fallen sharply in recent weeks after China temporarily reversed the overall downtrend.

While showing mixed behavior throughout 2021, investors are now withdrawing sufficient amounts of BTC for those withdrawals to dominate the landscape, notes chain analytics firm Glassnode.

“Bitcoin exchange flows returned to exit dominance until August as investors pull out BTC,” he said. revealed at the end of last week.

“The market has gone through a number of phases of trade flow dominance over the past year, with exit dominance last seen in late 2020.”

This ties in with a popular narrative focused on accumulating at current price levels, suggesting overwhelming faith in even higher prices to come.

“Extreme greed” strengthens its grip

“Extreme” emotions are back among crypto investors.

That’s according to the Crypto Fear & Greed Index, which this week sits firmly in its “extreme greed” zone.

Related: Top 5 Cryptocurrencies To Watch This Week: BTC, ADA, AVAX, CAKE, ATOM

While not quite at the top of its 0-100 scale, the index now measures 79/100, just 15 points from typical bullish peaks that prevent large price corrections.

The pace of change in Fear & Greed has been intense – just three weeks ago it measured 42/100, denoting “fear” as the overall emotion of the market.

Monday’s reading is therefore the highest since mid-April, when Bitcoin was at its current high.