Bitcoin slips below US$79,000 as rally cools after US$81,000 test

On the Chain: Bitcoin slips below US$79,000 as rally cools after US$81,000 test

Bitcoin has slipped back below US$79,000 after its rapid recovery ran into resistance above US$81,000, leaving traders to assess whether the latest surge marks the start of a more sustained crypto recovery or has simply moved too far too quickly.

At the latest check, Bitcoin was trading around US$78,800, while Ether was near US$2,460, Solana around US$97 and XRP close to US$1.45.

Bitcoin reached an intraday high of US$81,265 on Tuesday before being rejected near its 50-week moving average, which was sitting at roughly US$81,085.

ETF money continues to flow

Institutional demand remains one of the stronger arguments supporting the recovery.

US spot Bitcoin exchange-traded funds attracted US$337.56 million on August 24, while Ether funds drew US$115.57 million.

Solana products attracted another US$33.49 million and XRP products US$13.82 million. Bitcoin ETF assets had risen to US$98.56 billion, compared with US$78.67 billion a week earlier, reflecting both fresh inflows and Bitcoin’s sharp price recovery.

The flows provide an importants partly driven by roughly US$3 billion of short covering

Fresh liquidity returns to crypto

There are also signs of new liquidity entering the broader digital asset market.

Tether’s USDT supply increased by US$2.2 billion over the past week, while Circle’s USDC added US$1.8 billion Ripple’s RLUSD grew by another US$300 million

Stablecoins are widely used as trading liquidity across crypto markets, meaning renewed supply growth can provide additional capital capable of moving into Bitcoin and other digital assets.

Solana supply vote in focus

Solana remains one of the more closely watched major cryptocurrencies as validators vote on proposals that could reduce future token supply growth.

One proposal would accelerate the reduction in new SOL issuance, while another could increase daily token burns from roughly 650 SOL to between 7,500 and 9,000 SOL. Voting is due to run until Thursday.

SOL was trading around US$97 at the latest check after moving above US$100 during Tuesday’s rally.

US$83,000 becomes key Bitcoin level

Bitcoin’s failure to hold above US$80,000 has shifted attention towards the technical levels needed to confirm a more durable change in trend.

CryptoQuant believes Bitcoin has entered the early stages of a new bull market after rising 24% since August 17, with its Bull Score jumping from 30 to 80 in a week.

However, the research group sees a close above Bitcoin’s 365-day moving average at around US$83,000 as an important confirmation signal.

Source: au.finance.yahoo.com