The Bitcoin price has been in a tight range in the past few days. The BTC coin is trading at $47,265, which is about 5.5% below the highest point last week and 27% below its all-time high. Its total market capitalization has dropped to more than $888 billion, according to CoinMarketCap.
Why BTC price has stalled
The Bitcoin price stalled shortly after testing the $50,000 resistance level. This was a notable price since Bitcoin was trading at around $30,000 a few weeks before. Also, $50,000 has some significant psychological implications for the coin.
Therefore, this pullback is mostly because of this psychological nature. In fact, the price has experienced similar pullbacks whenever it has reached key levels like $30,000, $40,000, and even $45,000. The decline is also because of profit-taking.
Meanwhile, on-chain metrics show that activity within the network is relatively strong. For example, the number of entities within the Bitcoin ecosystem have been rising recently. While the number is still significantly below its all-time high, the rising trend is a bit encouraging.
At the same time, Bitcoin token transfers have risen to the highest level in more than two years. According to IntoTheBlock, the futures market momentum, which combines futures prices, volume, and open interest is in the bullish side.
Additionally, the number of Bitcoin transactions bigger than $100,000 has jumped to the highest level this week. Also, the total exchange inflows in the past few days has been $8.85 billion while outflows have risen to more than $7.7 billion. This means that the spread between inflows and outflows has been positive. Still, historically, on-chain metrics have often had a divergence with the real Bitcoin price.
The Bitcoin price weakness is happening even after the relatively dovish Jerome Powell. In his speech at the virtual Jackson Hole Symposium last week, the Fed chair hinted that interest rates will remain at historical lows for more than 2 years. An easy-money policy is usually bullish for Bitcoin and other risky assets.
Bitcoin price prediction
The BTC price is trading at $47,265. On the four-hour chart, this price is at the same level as the 25-day and 50-day exponential moving averages (EMA). The coin’s volume has declined slightly. Meanwhile, the price is slightly below the lower line of the ascending channel. It has also formed a head and shoulders pattern.
Therefore, while the overall trend for Bitcoin is bullish, there is a possibility that the coin will move lower in the near term. The key level to watch will be the psychological level at $43,835, which was the lowest level on 19th August.
