Bitcoin Weekly Forecast: Adoption wades through roadblocks as BTC price targets $50,000

• Bitcoin price has shown strength as it eyes a retest of $50,000.
• BTC adoption seems to be taking three steps forward and two steps back, but it is progressing nonetheless.
• If the selling pressure increases to produce a decisive close below $43,150, it will invalidate the bullish thesis.

Bitcoin price is making a comeback after a recent pullback. This attempt will confirm if the resurgence of bulls is true by producing a higher high above the recent swing high and propel BTC higher.

From $450,000 donations to shuttering of crypto businesses accounts

Bitcoin development received a major tailwind as FTX announced a $450,000 grant to Brink, a developer community, on August 13. Launched in 2020 with funding from big names in cryptocurrency markets like the Human Rights Foundation, Square Crypto and crypto exchange Gemini, Brink helps Bitcoin’s open-source developer community.

Crypto exchange FTX and lender Nexo are two of the recent additions to this list.

While this donation will significantly boost Bitcoin and adoption in general, Chase, the retail banking arm of JP Morgan, shut down the bank accounts of Compass Mining without any notice, according to the company’s CEO, Whit Gibbs.

Gibbs took to Twitter as he stated,

Shoutout to @Chase for shutting down @compass_mining accounts for doing our part to replace the old guard with self-sovereign, future-focused supporters of hard money. Get behind #Bitcoin or get out of our way.

While this is not the first time Chase has shut down customers’ accounts without notice, Compass Mining received help from the community and is currently with Signature, a crypto-friendly bank.

The televised interview on August 19 noted that El Salvador, which accepted Bitcoin as a legal tender, will keep the US dollar as the main currency of reference. This interview clarified that businesses would not be penalized for not accepting BTC in reference to a law passed in June. The law states that every “economic agent” must accept Bitcoin as a payment.

While Bitcoin and cryptocurrencies, in general, are relatively risky investments, El Salvador’s decision was a major step in the adoption of BTC. Although there will always be banks or institutions like Chase that steer clear of cryptocurrencies, Israel, on the other hand, is doubling down on BTC-related investments.

According to Israeli business publication Calcalist, investment firms and institutions investing in Bitcoin need to not just detail it but also justify it. This announcement is reportedly aimed at Silver Castle, a digital currency investment house. The Tel-Aviv Stock Exchange (TASE) revealed the country’s first Bitcoin-linked bonds for private companies.

Bitcoin price restarts its second leg-up

Bitcoin price started its retracement on August 14 and continued for roughly five days, shedding 8%. While the downswing was obvious considering the extended rally from August 5, BTC managed to stay above the August 12 swing low at $43,770. This development proved that the upswing is still intact.

However, a secondary confirmation will arrive after Bitcoin price sets up a higher high above the August 14 swing high at $48,144.

If such a move were to occur, BTC would likely target $49,024, followed by $50,950. In a highly bullish case, the resistance barriers at $55,210 and $56,670 might be tagged.

BTC/USDT 1-day chart

Supporting this bullish thesis is the 30-day Market Value to Realized Value (MVRV) model, which is currently hovering just above the opportunity zone at 11%. This fundamental index tracks the profit/loss of investors who purchased BTC over the past month.

A higher MVRV value indicates that many holders are in profit and that a sell-off might occur. However, this index recently dropped from 20% to 11%, suggesting that a short-term crash is behind us.

BTC MVRV 30-day chart

The supply on exchanges has been a reliable metric in predicting the outlook of Bitcoin over long-term periods. This metric has been declining since May 19 from 2.69 million to 2.47 million as of August 20. The 8% reduction suggests that investors are confident about Bitcoin price performance.

BTC supply on exchanges chart

One of the major sources of selling pressure for Bitcoin price comes from the BTC mining community and the spikes in the Miners’ Position Index, which is the ratio of the BTC leaving all miners’ wallets to its 1-year moving average. This can be used to approximately forecast sell-off.

This fundamental indicator has been zero or negative since March 5 and showed no significant surges even during the May 19 crash, suggesting that miners are not selling their holdings and are equally confident in Bitcoin price performance.

BTC MPI chart

While things seem to be going in favor of Bitcoin bulls, investors need to keep a close eye on IntoTheBlock’s Global In/Out of the Money (GIOM) model, which shows one large resistance cluster, ranging from $46,770 to $63,086 that might hinder the upswing.

Roughly 5 million addresses purchased 2.23 million BTC at an average price of $54,420. Therefore, a decisive close above $54,420 will alleviate a huge chunk of selling pressure, while a large number of the on-chain metrics are leaning bullish.

BTC GIOM chart

However, the inability of the buyers to push through the said level might indicate short-term weakness. A potential spike in selling pressure that pushes BTC to produce a decisive close below $42,451 will create a lower low and invalidate the bullish thesis. In such a case, BTC might head down to $40,550.

 

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