Bitcoin price turns to test lower support levels as $50K stays out of reach
Bitcoin (BTC) continued to range below $50,000 on Aug. 31, the final day of the month, as analysts demanded higher levels in order to continue the bull run.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
$51,000 remains the deal-breaker for BTC
Despite highly encouraging on-chain metrics and fundamentals, BTC price action disappointed the market throughout the weekend and beyond as a lack of momentum kept $50,000 at bay.
Major resistance, now solidified on exchanges at $51,000 and above, remains firmly in place, and analysts say the outlook remains muted until this level is turned to support.
According to Cointelegraph contributor Michael van de Poppe, “We clearly stated that $51,000 is the level that Bitcoin has to break through.”
According to van de Poppe:
Despite historic highs being just $17,000 away, these levels seem to be a distant target at the time of writing.
A look at buy and sell levels on major exchange Binance confirmed the need for significant buyer support in order for Bitcoin to exit its current trading zone.
BTC/USD buy and sell levels (Binance) as of Aug. 31. Source: Material Indicators/Twitter
Accumulation set to stave off a major price dip
Others shared the view that Bitcoin was drifting not toward resistance but to a retest of demand that nonetheless has cemented itself thanks to the previous accumulation phase.
“Slowly but surely, BTC is inching closer and closer toward its next major demand area,” said popular trader and analyst Rekt Capital.
The extent of accumulation in the $40,000 range is significant, and data suggests that it is unlikely that a significant price drop will ensue.
“With prices pushing above $50,000, and some notable profit-taking covered last week, the market currently sits at the top end of a very high on-chain volume node,” analytics firm Glassnode wrote on Aug. 30 in its latest weekly report.
The report showed that 1.65 million BTC has a cost basis between $45,000 and $50,000.
“On net, this indicates that a fairly strong set of high conviction investors remain in the market and is a powerful signal for the bulls,” analysts added.
Bitcoin UTXO realized price distribution annotated chart. Source: Glassnode