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Bulls getting stronger as bitcoin inches its way to $50,000

By Andrei Chirileasa

07:33, 11 August 2021

A hand holding up a bitcoin
Photo: Shutterstock

Bitcoin (BTC), the world’s largest cryptocurrency in terms of market value, has held firm in the last two days even as the US Senate passed its $1trn infrastructure bill, which also includes a controversial cryptocurrency tax. Some analysts see the bitcoin price resilience as a positive sign that the bullish momentum in the last three weeks will continue.

As the bill is now heading to the House of Representatives, investors hope that further debate on the scope of the new tax will help clear some aspects related to the crypto market and further raise awareness about it.

Bitcoin was trading just above $46,000 on Wednesday morning and has managed to consolidate above its 200-day moving average, which is another strong bullish signal. Since its most recent dip on 20 July, bitcoin has gained over 50%.

The recent rally has significantly improved investors' sentiment and the Crypto Greed & Fear Index has climbed from 10 to 70, marking a shift from “Extreme Fear” to “Greed”. This indicates that the bulls are again dominant in the market for the first time since the May sell-off.

All eyes on $50,000

While bitcoin’s price may face some resistance between $47,000 and $48,000, the threshold everyone is looking at is $50,000. A break above this level could reignite the buying spree like the one seen at the beginning of this year as fear of missing out on the next rally might outweigh concerns related to regulatory issues.

“A low volatile consolidation in the $44k-50k range would be a pretty bullish continuation sign to me,” Patrick Heusser, head of trading at Crypto Finance, said in his Tuesday note.

He added: “One first positive sign was the 'no-price move' to the infrastructure bill news. We (the traders at the desk) are unsure as to what will happen if/when we take out $50k.”

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Bitcoin to $100,000?

Bitcoin’s positive momentum has brought predictions of its price reaching $100,000 back into public attention.

Gold

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Long position overnight fee -0.0171%
Short position overnight fee 0.0089%
Overnight fee time 22:00 (UTC)
Spread 0.30

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0.65 Price
-10.290% 1D Chg, %
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Short position overnight fee 0.0137%
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BTC/USD

86,628.30 Price
-1.940% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
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Spread 106.00

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21,020.00 Price
-0.230% 1D Chg, %
Long position overnight fee -0.0248%
Short position overnight fee 0.0026%
Overnight fee time 22:00 (UTC)
Spread 1.8

Several analysts quoted by Bloomberg believe it's possible to see bitcoin at $100,000 even by the end of this year.

Thomas Lee, a managing partner at Fundstrat Global Advisors, is one of them. In an interview for CNBC, he said he expects the whole financial industry to move to new heights when the number of new COVID infections will start to decline. He added that bitcoin reaching $100,000 by year-end is “pretty reasonable”.

But before reaching $100,000, bitcoin should first conquer its all-time high of $64,800 set in mid-April. The digital currency is currently some 30% below that level.

Strong growth for altcoins

While bitcoin and ethereum (ETH) slowed down their rally in the last two days, alternative coins have seen some strong gains as they rush to catch up with the leaders. Binance coin (BNB), the native coin of the Binance blockchain, was up over 9% in the last 24 hours.

Cardano (ADA), one of Ethereum's top competitors, has gained over 20% in the last 24 hours. Ripple (XRP) was also up almost 10%.

Overall, the total capitalisation of the cryptocurrency market went up by almost 4% in the last 24 hours, reaching $1.92trn, according to Coinmarketcap.com.

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Read more: US infrastructure bill advances amid cryptocurrency debate

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