- Bitcoin looks to retest two-month highs above $42,000 en-route 200-DMA.
- Bullish crossover and RSI on the daily chart back the constructive outlook.
- BTC price ignores thr Chinese central bank’s warning amid increased adoption.
Bitcoin has kicked off the August month on the right footing, looking to extend the previous week’s 15% gains amid favorable fundamental and technical catalysts.
The flagship cryptocurrency hit the highest level since May 20 at $42,404 on Saturday, although failed to extend its recent winning streak and ended the day in the red around $41,400 levels.
The retracement in BTC price from two-month highs could be partly associated to profit-taking amid weekly closing. Meanwhile, the People’s Bank of China’s (PBOC) pledge to maintain heavy regulatory pressure on cryptocurrency trading and speculation also may have prompted a pullback in the world’s most favorite digital asset.
However, the upbeat momentum around the granddaddy of cryptocurrencies remains intact amid increased institutional demand and widespread adoption in financial transactions.
Bloomberg reported earlier on, Germany set out a new law, effective August 2, allowing institutional funds to hold up to 20% of their assets in cryptocurrencies.
The BTC price rallied on a rumor that Amazon.com Inc. would soon accept crypto as payment on its platform. Amazon later clarified, the “speculation” about its “specific plan for cryptocurrencies is not true,” but it failed to deter the bullish interests.
Bitcoin price to defy overbought conditions, with more upside in the offing
Looking at the daily chart, the BTC price is gathering pace to initiate a fresh upswing towards the horizontal 200-Daily Moving Average (DMA) at $44,750.
A bull cross, represented by the 21-DMA crossing over the 50-DMA to the upside, favors the bullish potential in BTC price.
However, BTC bulls are likely to face an immediate hurdle at the two-month highs of $42,404.
A sustained move above the latter could put the May 19 flash crash of $43,586 to test on their journey towards the 200-DMA.
The 14-day Relative Strength Index (RSI) remains in the overbought region but has eased off the higher levels, suggesting that bullish grip could likely persist in the near term.
BTC/USD: Daily chart
On the flip side, a drop below Saturday’s low of $41,069 could revive the selling bias, extending the corrective pullback towards the mildly bearish 100-DMA at $39,995.
A daily closing below that level could negate BTC’s upbeat outlook in the short term, exposing the previous week’s low of $38,345.
The next powerful support appears around $35,000, where the 21 and 50-DMAs intersect.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Coinbase lists WIF perpetual futures contract as it unveils plans for Aevo, Ethena, and Etherfi
Dogwifhat perpetual futures began trading on Coinbase International Exchange and Coinbase Advanced on Thursday. However, the futures contract failed to trigger a rally for the popular meme coin.
Stripe looks to bring back crypto payments as stablecoin market cap hits all-time high
Stripe announced on Thursday that it would add support for USDC stablecoin, as the stablecoin market exploded in March, according to reports by Cryptocompare.
Ethereum cancels rally expectations as Consensys sues SEC over ETH security status
Ethereum (ETH) appears to have returned to its consolidating move on Thursday, canceling rally expectations. This comes after Consensys filed a lawsuit against the Securities & Exchange Commission (SEC) and insider sources informing Reuters of the unlikelihood of a spot ETH ETF approval in May.
FBI cautions against non-KYC Bitcoin and crypto money transmitting services as SEC goes after MetaMask
US Federal Bureau of Investigations (FBI) has issued a caution to Bitcoiners and cryptocurrency market enthusiasts, coming on the same day as when the US Securities and Exchange Commission (SEC) is on the receiving end of a lawsuit, with a new player adding to the list of parties calling for the regulator to restrain its hand.
Bitcoin: BTC post-halving rally could be partially priced in Premium
Bitcoin (BTC) price briefly slipped below the $60,000 level for the last three days, attracting buyers in this area as the fourth BTC halving is due in a few hours. Is the halving priced in for Bitcoin? Or will the pioneer crypto note more gains in the coming days?