Bitcoin Price: $50K BTC vs. Fed -- 5 Things You Should Watch This Week in Bitcoin

Bitcoin has reached a major milestone, but it's staying power will be put to the test in the next week. Bitcoin (BTC) is back at $50,000 as a new week gets underway with a bang. After a strong weekend, Bitcoin finally crossed the long-awaited $50,000 mark overnight on Aug. 22. A firm sense of Deja vue is a common trait among traders. They are also curious about the future and whether Bitcoin has taken more than it can handle with its latest price explosion.
The United States Federal Reserve's annual Jackson Hole summit this week is a prime opportunity for macro triggers and internal sources of contention to create a chaotic week for cryptocurrency markets. Cointelegraph reviews five BTC price factors that are worth considering over the next few days.

Bitcoins $50,000: What could go wrong

Bitcoin not reaching $50,000 was a topic of great concern this weekend. All levels of activity, including low volumes and a Wyckoff distribution event that was bearish, were visible via social media by those not convinced of market strength.
Bitcoin held the psychologically important price level in traditional fashion, but it fell in the end. "If BTC could break out of here. People over-trading will lose their Btc and holders will win," popular trader Pentoshi summarized in one of the various tweets Sunday. "I said this once before it did an inexorable 6x. Know when it is time to trade and when it is not. All you need to do is nothing. My strategy is not to react when it happens. Pentoshi used a variety of references to Q4 2019, hinting at similarities between market composition now, and the beginning the main phase. The "springboard" was apparent when BTC/USD reached $50,000 for its first time in February. However it took some time for that level to become firm support, and then provide the foundation to a trip to the $64,500 all-time high.

Pentoshi asserts that even if BTC/USD pullbacks again, it will likely only be temporary. "Probably won't be much looking back if any," he added. "Right Now is all About Accumulation." Vertical accumulation only occurs when markup begins.
Tapering rumors fly as the virtual Fed summit nears Most likely, macro cues from the U.S. Fed are all coming this week.
The annual Jackson Hole gathering, which is now virtual, will focus largely on economic policy reforms related to the Coronavirus pandemic.

In particular, the markets will want information on whether and when asset purchases might be tapered. Analysts suggest that markets can only be spun by a move this priced in. "They're still very very dovish. They're slightly less dovish," Garrett Melson, a portfolio strategist at Natixis Investment Managers Solutions, told Yahoo! Finance last Wednesday "But that's a bit semantics at present. Taper is well documented. It's inevitable. It's just a matter time and should not surprise many investors.
Stocks were already weakening at the end of last week thanks to tapering fears, with the start of trading in the U.S. yet to come at the time of writing. Bitcoin surged and gold suffered severe losses while Bitcoin was down. Gold has since made up much of its recent ground. As Cointelegraph reported, gold bugs remain convinced that the precious metal will continue to attract investment in the long term, with safe-haven seekers staying away from Bitcoin due to volatility.

China has reached the top of Bitcoin prices?
Bitcoin spot prices may not be appealing to you but there are no doubts about its strength as a network.
After months of recovery, the difficulty and hash rate has outperformed themselves over the past week.
According to estimates, the hash rate has increased 8 times per second (EH/s) over Monday. This represents a roughly 5% increase in mining computing power. At 121 EH/s this hash rate is 47 EH/s short of the all-time highs reached before the China mine rout. "Bitcoin hash rate is continuing its recovery from one of the largest infrastructure displacements in modern history--with roughly 45% of the Bitcoin mining industry, billions of dollars, relocating continents as the network on continued as normal," popular Twitter account Documenting Bitcoin wrote last week.
"Bitcoin had zero downtime."

There is no downtime or loss of demand. With the return of hashing powers, there have been difficulty adjustments. These adjustments have only served to enhance network security and increased competition.
With that, the difficulty is set to increase a third time in a row in two days' time, this time by around 9% -- a post-China high. This is good news for those concerned about long-term profitability in mining, as well as the role China played with Bitcoin's success. One commentator however highlighted a potential problem when he compared the year's bull market after the halving to previous ones. "Around 120k-138k blocks AFTER miner capitulation bottom in each bear market, bitcoin has topped out," Parabolic Trav noted Sunday. "120k - 138k blocks build miner inventories enough (after they ho dl briefly) to crush any market with. This China exodus cycle forced inventory to market quickly. The implications

If the China episode has slowed the bull run this year, then a potential second price peak could occur earlier than many believe. Cointelegraph reported however that some theories claim that 2021 may produce a "double-boom" type BTC price peak with two peaks. One will be at the beginning of the year, and the other one possibly later. Exchange flows return to dominate There is an interesting trend in 2020 that seem s to be repeating the bull run of last year. In recent weeks, Bitcoin exchange reserves fell sharply after China temporarily reversed the downtrend. Glassnode says that although investors may exhibit mixed behavior through 2021, they are now withdrawing BTC large enough to take control of the landscape."Bitcoin exchange flows have returned to a dominance of outflows through August as investors withdraw BTC," it revealed late last week. "The market has seen a transition through many phases of exchange flows dominance in the last year. The last time outflow dominance was observed in late 2020." This ties in with a popular narrative focusing on accumulation at current price levels, suggesting overwhelming faith in higher prices still to come.
"Extreme glutt" increases its grasp Crypto investors now have the opportunity to feel "extreme" emotions. That's according to the Crypto Fear & Greed Index, which this week is firmly within its "extreme greed" zone. Although the Index is not quite at its top of the 0-100 range, it now measures 79/100. That's just 15 points away form bullish peaks, which prevent major price corrections.
The pace of Change in Fear & Greed was rapid -- it was only 3 weeks ago at 42/100. That is "fear" being the overall emotion on the market.
Monday's reading is therefore the highest since April mid-April when Bitcoin was at its absolute peak.