Bitcoin stalled after approaching the $50,000 resistance level on Monday. The cryptocurrency was trading at about $49,500 at press time and is up about 8% over the past week. Analysts expect a period of consolidation ahead of Friday’s option expiration date and news from the Federal Reserve’s annual economic policy symposium in Jackson Hole, Wyo. “The trend is bullish; however, caution is to be exercised at these levels due to the decline in volume as well as resistance from April and May,” Marcus Sotiriou, a trader at GlobalBlock, wrote in an email to CoinDesk.
“$51K would be a natural place for a short-term pause in the rally,” Katie Stockton, managing director of Fairlead Strategies, wrote in a Monday newsletter. “Long-term momentum behind bitcoin has strengthened and the 200-day (40-week) moving average is rising again, supporting a bullish long-term outlook,” she wrote. Several analysts noted that extreme overbought conditions have unwound since April, which is providing support for the crypto rally.
“Right now, bitcoin and other cryptos have enjoyed technical support (as they were becoming mildly oversold),” Santiago Espinosa, a strategist at MRB Partners, wrote in an email to CoinDesk. “At this juncture, some cryptos can continue to do well if policymakers neglect inflationary pressures and regulatory issues don’t become a mainstream problem.”
Roughly 25% of bitcoin options open interest is set to expire on Friday. The largest concentration of open interest is seen at the $50,000 strike price, which is also a key technical resistance level.
The bitcoin options market is placing a 45% chance of BTC trading above $50,000 by the end of September, according to options data provider, Skew. Bloomberg Intelligence’s Mike McGlone, who won plaudits last year for being among the most prominent analysts predicting that bitcoin would go to $50,000, sees further upside now that the largest cryptocurrency has returned to the mark following a steep market correction.