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Home > Analysis > Bitcoin (BTC) Price Down 3% after Rallying Slightly Above $40,000

Bitcoin (BTC) Price Down 3% after Rallying Slightly Above $40,000

Bitcoin price has been consolidating since mid-May, where a lot of events making an impact on BTC happened.

Bitcoin (BTC) price climbed as high as $40,499 on July 26, 2020, adding approximately 5.52% during the day. The digital asset, however, closed yesterday trading at $37,337 according to Binance-backed Coinmarketcap. Meanwhile, Bitcoin was trading around $37,100 at the time of reporting, 2.5% down.

Notably, Bitcoin price stop-hunted the bears during the weekend when the price suddenly reversed and pumped above $40k. As a result of the pump, Bitcoin price has now invalidated a drop to lower levels that could mean a sustained bear market.

However, the market might not be out of the woods yet as the $40k resistance level has denied the asset prior rallies in the past. A breakout above $41k could validate a rising trend. Forming higher-highs and higher-lows especially on a higher time frame chart.

An earlier report by various crypto news outlets had indicated that Amazon.com Inc (NASDAQ: AMZN) is looking to accept Bitcoin in the foreseeable future. However, the company’s spokesperson denied the claims.

“Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true,” the firm noted.

However, the company did not refute plans in developing digital currency and also tapping on blockchain technology.

According to Wu Blockchain, the spike on Monday was due to the Chinese market speculating on the Amazon rumors. “Bitcoin rose by 12% in one hour, leading the increase. Because [the] Chinese have just gotten up. It is obvious that the price of Bitcoin has started to rise after this rumor about Amazon spread in the Chinese community,” the firm said.

A Rewind into Recent Bitcoin Price Pump

Bitcoin price has been consolidating since mid-May, where a lot of events making an impact on BTC happened. Among them, Bitcoin traders who mostly rely on price action had noted a support level of around $30k. Following the recent dip below $30k last week to around $29k. Speculation of a major breakout was lurking.

Furthermore, Bitcoin price had formed a perfect falling wedge in a downtrend that spells a looming reversal. Additionally, the RSI indicated a notable divergence on the overbought side a few days following the breakout.

For the first time in the history of Bitcoin, it will be accepted as legal tender. El Salvador lawmakers voted overwhelmingly to make Bitcoin a legal tender, challenging a lot of financial institutions and also making the industry more interesting.

Aside, ‘The B Word’ conference that took place last week largely validated the long-term stay of the cryptocurrency market, and especially Bitcoin. However, Bitcoin miners who play a critical role in securing and maintaining the blockchain have received huge backlash for energy consumption.

The Chinese government undertook a huge crackdown on Bitcoin miners resulting in a decline in the Bitcoin hash rate.

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