Bitcoin (BTC) Slips Below $80,000 As Rally Cools

Bitcoin (BTC) fell below $80,000 after its latest rally ran into resistance around the $81,000 level. The flagship cryptocurrency reached an intraday high of $81,265 on Tuesday before losing momentum and closing the day at $78,526. BTC is marginally up during the ongoing session.

Traders and market watchers are assessing whether the latest rally is the beginning of a sustained rally. The rally has taken the price into overbought territory, prompting some traders to take profits.

Bitcoin Cools After $81,000 Test

According to TradingView data, BTC reached an intraday high of $79,500 on Friday, but declined on Saturday, dropping 1.62% to $77,054. Selling pressure persisted on Sunday as BTC fell to a low of $75,538. However, it rebounded to reclaim $77,000 and settle at $77,729. Price action remained positive on Monday, rising 1.61% to $78,981. BTC crossed $80,000 on Tuesday and reached an intraday high of $81,265. However, it failed to sustain momentum and pulled back below $80,000 to $78,526. The flagship cryptocurrency is up 0.73% during the ongoing session, trading around $79,100.

The drop back below $80,000 comes after BTC broke out of its trading range, reclaimed key levels within a few sessions, and reached $80,000. However, it could not overcome heavy selling pressure around $81,000.

Weaker Dollar, ETF Inflows Drive Rally

BTC’s rally was supported by several factors, including a weaker dollar following the US Treasury’s announcement to double bond buybacks, and sustained ETF inflows. According to CoinGlass data, Bitcoin ETFs recorded $337.60 million in inflows on Monday and $314.30 million on Tuesday, extending their inflow streak to seven days. BlackRock’s IBIT and Fidelity’s FBTC have recorded the most inflows, with ARKB, BITB, and HODL also recording fresh inflows. Solana and XRP ETFs have also recorded fresh inflows of $33.49 million and $13.82 million, respectively.

Liquidity in crypto has also improved, with USDT supply increasing by $2.2 billion over the past week. USDC supply also increased by $1.8 billion, while RLUSD added $300 million, according to data from RWA.xyz.

Is Bitcoin At Risk Of A Deeper Pullback?

Meanwhile, BTC’s Relative Strength Index (RSI) crossed 80, indicating overbought conditions. While an overbought RSI does not confirm a reversal, it shows that the price has increased rapidly compared to recent trading history. An overbought RSI increases the likelihood of traders booking profits and pushing the price into a consolidation phase. Despite the pullback, BTC is trading above key levels on the daily chart, including the 200-day SMA. BTC’s four-hour chart suggests the rally retains momentum, with the average directional index at 56, significantly above the 25 threshold. However, the ADX has eased following the initial breakout. Bull Bear Power, while positive, has also fallen significantly from levels recorded earlier in the rally.

Analyst Ted Pillows stated in an X post that BTC had developed a bearish divergence on the four-hour chart, adding that the price could correct towards the $72,000-$74,000 zone. Bitcoin’s liquidity heatmap shows liquidity clusters around $78,000, $77,500, and $77,200. There is also substantial liquidity between $79,700 and $80,500, while larger clusters sit between $81,000 and $82,000.

Bitcoin Must Reclaim $80,000

Analyst Daan Crypto Trades noted that BTC had reached the upper boundary of a broader trading range, but had not fully tested May’s $83,000 high. According to the analyst, BTC must stay above $80,000 to confirm a bullish scenario. The analyst identified the $77,500-$78,000 area as a key level. A break below these levels could see BTC drop towards $75,000.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

This article was originally published as Bitcoin (BTC) Slips Below $80,000 As Rally Cools on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.