Bitcoin (BTC) rallied overnight on August 5 as a further rally from the trend line opened the door for further gains.
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD bounced off a local bottom at $22,400 to add around 4.6%.
The pair had reversed direction just at key supply support on major exchange Binance, helping to stave off a more substantial loss from the 200-week moving average (MA) at around $22,800.
While that key zone remained uncertain for the bulls, a rebound from the 21-period moving average on the daily chart gave on-chain resource material indicators cause for optimism.
BTC Price Daily Chart Sets ‘Tentative’ Long Signal
Material Indicators, FireCharts cofounders, posted a Twit saying that, “On the #Bitcoin Daily chart, the Trend Precognition A1 algorithm is indicating a momentum shift from the Monday drawdown. If bulls can jump over the 21-DMA, we’ll get to see if the bear market rally has another pump in it.”
They further added that, “Helps if I post the chart with it. It was worth the wait. #BTC reclaimed the 21-DMA and the Trend Precognition A2+ aglo started flashing a new signal. It’s tentative until the D close.”
Trader and analyst Rekt Capital, however, expressed caution about Bitcoin’s poor track record in turning the 200-week moving average into strong support for this bear market.
“Historically, BTC has been able to generate tremendous buying interest at the 200-week MA,” he argued.
“But if $BTC doesn’t retest the MA anytime soon, that will likely serve as further evidence that this rally is merely one of relief.”
Equally conservative in its pricing outlook was trading firm QCP Capital, which in its latest market update sent Telegram channel subscribers that the overall picture was “very mixed.”
“Economic data globally points to poor growth and a coming global recession,” the update reads, highlighting upcoming July Consumer Price Index (CPI) inflation data to be released on August 10.
Ethereum Force Fails To Convince
Regarding altcoins, Ether (ETH) and other large-cap tokens joined Bitcoin’s easing push to the upside.
Most recently, ETH/USD was hovering around $1.665, and ETH/BTC; however, it failed to break resistance closer to the 0.075 mark after a second test.
With the Ethereum merger scheduled to take place on September 19, concerns were also rising about the likelihood of a contentious hard fork of the network.
“The most pressing and immediate risk in the crypto markets is the ETH meltdown that is scheduled for September,” QCP Capital further explained.
The firm added that markets had already “started to price in the possibility of a material fork.”
It is worth remembering Vitalik Buterin’s last July announcements in regards to Ethereum. Butelik explained that after The Merge, 4 other important milestones will come:
The Surge: planned for 2023, plans to introduce sharding in Ethereum that divides the Blockchain into smaller partitions (known as “shards”) in order to increase the scalability of the network.
The Verge: having no estimated implementation date, foresees “a powerful update of the Merkle tests”.
The Purge: will reduce the hard disk space required for validators.
The Splurge: consists of a series of small updates that will ensure that the network runs smoothly after the previous four stages.
However, none of this will happen if the Merge does not happen first.
By Audy Castaneda