Bitcoin fails again when trying to conquer $ 50,000. Competition from other cryptocurrencies, such as Cardano or Solana, takes its toll
The price of bitcoin falls back to $ 49,400 after unsuccessfully attempting a new assault on the psychological level of $ 50,000.
The most popular cryptocurrency in the world has already tried in August to liquidate this resistance on several occasions, but all attempts have been unsuccessful. In this area, the exhaustion of bullish investors is noted .
In reality, the true technical resistance, not the psychological one, is at $ 51,000 . It is just the level that marks the 61.8% Fibonacci retracement from the April highs to the June lows. But bitcoin didn’t even come close.
Given the relevance of this zone, bitcoin would need to close above $ 51,000 for the extension of the rebound to take its course.
Crypto optimism explosion sustains bitcoin
The umpteenth attempt to overcome this zone came thanks to an explosion of optimism in the cryptographic ecosystem . The truth is that the flow of news has turned upside down at the beginning of September, for bitcoin and for the rest of ‘altacoins’.
In the opinion of Petr Kozyakov , co-founder and CEO of the global payments network Mercuryo , there are two pieces of news that explain the latest momentum of bitcoin.
On the one hand, it has just emerged that Twitter plans to allow payment with bitcoins and ethers in its ‘Tip Jar ‘ function . This functionality allows content creators to obtain funding for their projects.
On the other hand, there is “the official launch of bitcoin as a legal tender in El Salvador as of September 7 ,” Kozyakov said .
This expert expects the price to remain around $ 50,000 but also believes that there is greater optimism among buyers, which could drive increases between now and the end of the year.
Furore for the ‘altcoins’ linked to the DeFi ecosystem
It must also be taken into account that a good part of the capital flows that previously went to bitcoin, are now being placed in alternative cryptocurrencies (‘altcoins’) linked to the emergence of decentralized finance (DeFi). They are coins that smoke .
This is the case of the Cardano , which once again exceeded its all-time highs above $ 3, or the Solana , which soared around 60 percent in the last week, while Polkadot appreciated 22 percent.
Ether, the currency that is waging war with bitcoin to dominate the market, did not fare bad either , and which soared to $ 3,843, compared to $ 3,100 at which it was trading in mid-August, up 24 percent.
This euphoria over ‘altcoins’ featured retail investors, who at the end of May had a 37.5 percent share of these coins, compared to 18 percent in January, according to data cited by analysts at JP Morgan. .
Bitcoin attracts less money
With all this competition, the truth is that bitcoin failed to seduce many new buyers . The cryptocurrency’s funds saw a capital outflow of $ 61 million in August, according to data from CoinShares .
According to the same source, in 14 of the last 16 sessions this was the dominant trend, the outflow of capital.
Under these conditions, it will be important for bitcoin to sustain the $ 50,000 level so that the upward momentum, which has already been less than in other currencies on the market, does not fade.
If the declines go further, prices could head towards $ 42,400, where there is support made up of the 38.2 percent Fibonacci retracement.
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