The cryptocurrency landscape experienced a roller-coaster ride this week. Initial optimism, sparked by regulatory developments, saw Bitcoin surge by 7%, only for it to backtrack, dragging other major tokens down with it.
Earlier in the week, the crypto market lit up with optimism as a U.S. federal appeals court directed the Securities and Exchange Commission to reconsider its refusal of a bid that could potentially convert the Grayscale Bitcoin Trust into an exchange-traded fund. The hopeful environment nudged Bitcoin’s price to nearly touch $28,143, a peak it hadn’t reached in close to a fortnight. Yet, the high didn’t hold.
The aftershock of Bitcoin’s fleeting rally was evident across the digital asset spectrum. Major tokens like XRP (XRP) and Solana (SOL) experienced a decline, registering over 5% dips from their Tuesday highs. At the time of writing, Bitcoin’s price stands at $27,170, dropping from its recent zenith of $27,900.
Despite its recent spike, Bitcoin closed its daily trading above two essential moving averages. However, this hasn’t translated into solid intraday support. The uncertainty left market observers treading carefully.
Bitcoin’s sharp upswing on August 29 hinted at the likelihood of its price fluctuating between $24,800 and $31,000 in the coming days. Now, as the 20-day exponential moving average stabilizes around $27,160, and the relative strength index hovers just below the midpoint, it suggests a weakening selling pressure.
Market bulls will likely be on the defensive, guarding the breakout threshold of $26,833. Holding this ground will indicate their control, possibly pushing Bitcoin towards the 50-day simple moving average of $28,600, and potentially further towards $31,000.
On the flip side, if the bears manage to bring the price under $26,833, it might signify their dominant position, leveraging every rally attempt. In such a scenario, Bitcoin might once again approach the solid support base of $24,800.
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