Bitcoin's August Rally Cracks as it Falls Below $79,000

Bitcoin's August rally has started to show signs of cracking, as it fell below $79,000 on August 27. The pullback comes after a rapid rise that saw the cryptocurrency surge over 23% in just one week.

The decline was triggered by Bitcoin's failure to hold above its 50-week moving average near $81,085, according to CoinDesk data. This rejection also placed BTC below a key resistance area extending towards the May swing high near $82,800.

Despite the pullback, Bitcoin remains well above all four exponential moving averages on the daily chart, with the 20-day EMA standing at around $71,865 and the 200-day EMA at $71,974. However, momentum indicators show that the rally has become stretched, with the daily Relative Strength Index (RSI) reading near 79.

Traders are now looking towards August 28, when around 81,700 Bitcoin options worth $6.44 billion are scheduled to expire on Deribit at 08:00 UTC. The $75,000 strike holds $236 million in call open interest, while another $157 million sits at $80,000.

Deribit chief risk officer Shaun Fernando noted that the concentration of notional value within 5% of BTC's current price could increase gamma hedging into the expiry. The daily chart still carries a bullish trend structure despite the two-day pullback, but buyers will need to reclaim $79,200-$80,000 before another attempt at $81,000-$83,000.