On August 8, the Bitcoin Rate Jumped Up to $45K, But Correction is Possible Soon
On Sunday, August 8, the Bitcoin rate added 1.65% to $45363, but many experts expect a correction in the rate.
The top cryptocurrency climbed 1.65% to $45,363 on August 8, continuing the rally that has already shown it jumped 21.62% from its August 5 low of $37,300.
On Wednesday, August 11, the release of the July inflation report from the US Bureau of Labor Statistics is expected.
Previously, Bitcoin bulls reacted positively to previous inflation reports and effectively protected the cryptocurrency from falling below $30,000 after the May 19 crash.
In addition, their attempts to raise Bitcoin above $40,000 were crowned with success. Although the BTC rate grew rather slowly, it still reached $45,000. This indicates strong demand for Bitcoin, which has begun to break out of the summer recession.
According to the Glassnode chart published by the chief investment officer of Moskovski Capital, Lex Moskovski, the increased number of newcomers to the Bitcoin network corresponded to the increase in the BTC/USD rate.
In addition, on-chain analyst Willy Woo said that due to the imbalance in supply and demand for Bitcoin in the market, the rate could grow up to $50,000.
According to him, due to the fact that all investors were buying up Bitcoin, a “supply shock” was formed. Woo also recalled that the Bitcoin market was declining on July 15 after a session high of $36,675. The chart below highlights the Bitcoin liquidity shock events across all exchanges and their relationship to prices.
However, given the previous top-down Fibonacci retracement fractals, there is a risk of a rebound after Bitcoin rallies.
Bitcoin has one characteristic trend. After setting record highs, the rate corrects to the 200-week exponential moving average (200-week EMA; yellow wave). Then it hits the bottom to start the next bullish cycle.
In the last two cases, the BTC / USD exchange rate showed a false recovery after testing the 23.6 Fibonacci line as support. Due to the collision with strong resistance at the higher Fibonacci levels, the upward movements were unable to turn into large bullish impulses.
Bitcoin is up over 50% in 2019 after bouncing off the 23.6 Fibonacci line of $7,357. But near the 61.8 Fibonacci line of $10,613, Bitcoin faced strong selling pressure. As a result, it resumed the downtrend and fell to $3,858 in March 2020.
If this scenario repeats, Bitcoin could face strong resistance at Fibonacci 61.8, equal to $46,792. The rate can then correct below to retest its 200-day EMA below $20,000.
Independent market commentator and trader Keith Wareing suggested that the bullish crossover of Bitcoin’s two weekly moving averages hints at the start of a multi-month bull run.