Another Red Weekly Close For Bitcoin, Why A Rebound Is On The Horizon
August 22 2022 - 6:00PM
NEWSBTC
Bitcoin had been able to break out of its red streak earlier in the
year after making 11 consecutive red weekly closes. With the market
recovery, the digital asset had begun to return some green weekly
closes. That is until the market correction, and bitcoin lost about
$4,000 off the top of its value. This resulted in a weekly close
for the prior week, and even though it looked like a recovery might
be on the horizon, bitcoin has recorded another red weekly close.
Two Red Closes Within the last couple of weeks, bitcoin had seen
some incredible movements that had returned faith in the market.
The cryptocurrency had risen as high as $25,200 before being beaten
back down by the bears. Nevertheless, the cryptocurrency continues
to maintain a strong bullish trend, although at a much lower price
level. Related Reading: Investor Sentiment Falls As Crypto Market
Sheds $100 Billion Due to the retracement back down from $25,200,
the digital asset had recorded its second consecutive red close.
Two red weekly closes are no cause for alarm for a highly volatile
digital asset such as bitcoin, but it has often set a precedent in
the past. An example of this is back at the beginning of April when
the asset had seen two consecutive red weekly closes. It would go
on to see another 9 red closes, the longest in the history of
bitcoin. However, looking at other times when the digital asset had
seen such trends, it had not spent too long in it. One example of
this is back in June when the market had declined to $17,600. It
was the second consecutive red weekly close, but the reversal was
swift. A Bitcoin Rebound In The Works? One of the biggest
threats to wealth is rising inflation. This primarily impacts the
purchasing power of the currency depending on how large the
inflation rate is. The last three reports from the Fed have seen
inflation rates hit the highest they have ever been in the last 40
years. This, understandably, triggered panic among investors. With
the rising inflation, more investors are moving to cryptocurrencies
such as bitcoin. This is because the digital asset has always been
ahead of the inflation rate. Where the inflation rate has reached
as high as 9%, bitcoin had seen yearly returns of more than 200%
last year. Given this, it is expected more investors will move
funds into the “digital gold.” On-chain analytics firm Santiment
has also revealed that it expects the digital asset to recover in
the new week. This is due to the fact that short positions on
exchanges have ramped up following the price decline. With so
many people betting against the market, it becomes an opportunity
for investors to accumulate, and accumulation trends often precede
sharp recoveries. Related Reading: Bitcoin Price Declines Below
50-Day MA, Is A Recovery Expected? Bitcoin’s price is still holding
up nicely. The digital asset had previously fallen below $21,000 on
Sunday but had recovered once more to be trading above $21,200.
Bitcoin is also showing meaningful support on the 4-hour chart
ahead of the opening of the trading day. If it maintains support at
$21,200, then this will likely serve as a bounce-off point for the
cryptocurrency. Featured image from GoBanking Rates, chart from
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