Bitcoin Rebounds Back To 49k: New High Or Dead Cat Bounce?
Is Bitcoin primed for a new high or is this a dead cat bounce?
Covered:
- Bitcoin Rebounds Back To 49k
- Fear And Greed Index
- September Outlook
Bitcoin Rebounds Back To 49k
Credit: CoinMarketCap.com
Bitcoin (BTC) got back to $49k USD on Friday after a few days trading below in the $46k range. BTC began the week trading above $50k, but traded below that level for most of the week.
A strong August overall saw renewed market optimism. Even CNN commented on Bitcoin’s recent uptick. But that didn’t stop some from speculating that a slow end to the month was a sign of a bear market or that we are in a dead cat bounce.
However, Bitcoin’s strong bounce shows a steady price floor. As a result, calls for a bear market or dead cat bounce are looking less promising.
Not to mention, recent comments from Fed chair Jerome Powell on tapering and inflation appear to be propping up the market. The seven day moving for transaction volume is at an all-time high, according to Glassnode.
#Bitcoin $BTC Transaction Volume (7d MA) just reached an ATH of $8,367,593,288.99
View metric:https://t.co/rngyRZtyyM pic.twitter.com/24f7tWvevj
— glassnode alerts (@glassnodealerts) August 28, 2021
Fear And Greed Index
Despite the strong month overall, the relatively small drop renewed warnings of a bear market. However, the drop coincided with August expirations. As has been the case in recent months, prices fall considerably before the final Friday of the month.
And, considering the overall bullish month of August, the fear and greed index was trending toward extreme greed at the start of the week.
The Fear and Greed Index hovered above 75 on the 23rd, indicating extreme greed in the market. Credit: https://btctools.io/
It’s unsurprising that shorters took advantage of the greed in the market. But what is actually surprising was how high the price stayed. The max pain for Friday, according to Coin Options Track, was 42k.
Even with greed in the market, the price isn’t falling as aggressively during expirations like it had in recent months.
September Outlook
Things are looking promising for BTC and the rest of the market. Bitcoin will officially become legal tender in El Salvador. Ethereum continues to burn through its supply. And the third largest crypto in the world, Cardano, is finally delivering smart contracts on Sept 12th.
Credit: tradingview.com
With Bitcoin dominance steadily falling all month, positive catalysts for other cryptos will help keep Bitcoin on track. That said, Bitcoin has a lot going for it on its own with adoption from El Salvador and myriad institutional investments.
Barring any black swan events, Bitcoin, and the rest of the market, appear poised for a strong September.
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