Bitcoin reaches the $50,000 mark, but it may be held back by psychological obstacles.
BITCOIN is seeing a comeback as the token tries to rebound from the increased volatility that has plagued the market since the beginning of the year. While it is improving, experts have found it to be chafing against “psychological resistance.”
Despite the fact that bitcoin has lost its dominance in the crypto market due to excessive pressure from altcoins this year, it has seen its fair share of instability. In late July, the coin fell below $30,000 (£21,685.65) for the first time since the end of 2020, marking a year low. While the token’s price is currently hovering around $50,000 (£36,142.75), it still faces challenges, including “psychological barriers.”
Bitcoin has made a spectacular comeback in recent months, gaining more than $20,000 since July 21.
The current value of the token is $50,222.30 (£36,303.44), which is the highest it has been since May.
However, due in part to investors’ “psychological resistance,” it has stumbled to its new position.
Because of Bitcoin’s high price, it frequently reaches new milestones, which are typically followed by little declines.
Prices can tumble for months before the pattern breaks and the token rises above it.
Experts believe that the price drop is due to investor concerns over BTC’s intrinsic value.
They frequently believe that new milestones are unreasonable and therefore sell, lowering the price.
However, each time this occurs, Bitcoin rises and breaks through the resistance point farther down the line.
And this, according to analysts, is what is currently taking place.
Last week, according to Daniela Hathorn of dailyfx.com, there was some psychological resistance.
Despite the fact that it is picking up again, she believes resistance will continue until the next milestone is reached.
“As expected, Bitcoin encountered resistance above the psychological $50,000 level last week, resulting in a fall to $46,500 (£33,612.76), giving new purchasers some breathing room.
“Momentum appears to be moving up again, but as sellers try to preserve their positions, there is likely to be some significant resistance up until $55,000 (£39,757.02), so additional sideways consolidation cannot be ruled out within this $5,000 (£3,614.27) gap.”
Investors should wait for the coin to surpass a less significant benchmark, according to Ms Hathorn, as a hint that new psychological barrier is approaching.
“A break above $52,700 (£38,094.46) would be a strong sign that buyers are preparing to take on the next psychological resistance level above $55,000,” she said.
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