Bitcoin Makes Weekly Close Above $50k Level, This is the Next Price Target to Watch: BTC Price Analysis
After 2 weeks of consolidation, Bitcoin managed to make a weekly close above the critical $50k level, marking another step forward in bull market continuation validation.
This is now the fourth consecutive weekly close above the 21-week, 40-week, and 200-day moving average, 3 major levels that have been successfully reclaimed in order to re-enter bull market continuation validation. It is important for BTC to start establishing $50k as support this week, as the bulls start eyeing $55k to $58k, a heavy technical and on-chain zone of resistance.
Notably, Bitcoin also managed to close above $50.5k the intraweek highs from 2 weeks ago and $51.1k, a key 61.8% retracement level. This is a very bullish technical signal and suggests further upside in the coming weeks.
So far, BTC has followed our ideal scenario where price enters consolidation after reaching near-term overheated technical conditions at $50k from 2 weeks ago. On the way up to $50k and during consolidation, various groups of older coins took profit, causing a slight drop in UTXO Age Distribution. This also caused the Age Spent Output Bands metric to register a small temporary spike.
The selling soon stopped, and the older groups of coins returned to accumulation, causing the age spent output bands metric to fall back down, confirming there is no trend of whale exit liquidity. These metrics strongly invalidate the bear’s call for a bull trap.
Of course, we have to remain open to all possible scenarios and will continue to monitor aging groups of coins and other key on-chain metrics to identify if whales are looking to sell in the $55k to $58k area. As of now, there is no sign of whale exit liquidity, another sign that bulls are back in control.
On-chain Metrics Showing Strength
During the 2-week consolidation, BTC continued to be accumulated with spot exchange reserves down another 25,336 BTC. During this period, BTC tested key support near $46.3k at the 21-day MA, 21-day EMA, and other confluent levels.
At the timing of writing, BTC is up nearly 77% from the lows at $29.2k, with funding rates at neutral levels. Open interest is soaring, reaching a high of $12.5B today. With such a strong rally and neutral funding rates, this suggests BTC still has plenty of upside. It would be less ideal to see high funding rates for an extended period of time while price rallies, which makes the current conditions very favorable for BTC bulls.
The trend of coins older than 12 months continues to show accumulation aside from the 18-months to 2-year-old coins, which have been falling, while at the same time the 2 to 3-year-old coins are rising. This is likely the gradual aging of these groups of coins. Overall, the trend continues to show older coins are holding.
Stablecoin reserves remain near the highs at $19.2B, signaling plenty of capital has yet to flow into the market. The bulls would like to see these stable coins enter the market, especially if BTC starts testing $55k to $58k.
Macro conditions continue to favor the bulls, with the Federal Reserve easing concerns of tapering bond purchases indicating rates will remain at zero for longer, a recent miss on US payroll report potentially delaying the start of tapering.
El Salvador to Adopt Bitcoin
Bitcoiners around the world are looking forward to September 7th, 2021, as El Salvador will be officially adopting Bitcoin as legal tender. El Salvador’s adoption of Bitcoin can be seen as a major step forward in having Bitcoin become more recognized, especially among developing countries in need of financial inclusion in the global economy.
Overall, fundamentals, technicals, and on-chain metrics continue to show strength, suggesting Bitcoin’s mid to long-term outlook remains bullish.Source