Bitcoin Loses Steam Below $79,000 After Rapid Rally Fails
Bitcoin's rapid rally has finally begun to slow down as it fell below $79,000 on August 27. The cryptocurrency had reached an intraday high of $81,265 on August 25 but failed to reclaim the resistance area near $82,800.
The pullback began after Bitcoin traded above its 50-week moving average at $81,085 and encountered resistance from a significant technical level. Despite this, the seven-day gain for BTC remained close to 13.8% as it traded around $78,747 on CoinGecko data.
Analysts point out that the August rally was largely driven by forced buying in the derivatives market, which has now diminished. The largest single-day Bitcoin short liquidation event since 2019 occurred on August 19, followed by a surge in leverage and long positions during the climb.
However, as Bitcoin failed to hold $80,000, long liquidations added to spot selling, contributing to the decline. CryptoQuant has also flagged elevated unrealised profits and increased exchange inflows following the rally, leaving more coins available for sale if holders take profits.