Bitcoin Retreats Near $40,000 After a Strong Weekend Rally

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3rd Party Analysis 02 Aug 2021

Key Takeaways

  • Bitcoin slides back toward the $40,000 region following a Sunday high of $42,500
  • Ether soars over 7% on Sunday as crypto traders expect a major update to its network this week

Bitcoin Retreats Near $40,000

Bitcoin pulled back from its weekend highs on Monday as the rally lost steam after price reached its highest levels since May. The orange coin was able to pierce the $42,000-milestone and log a 2.5-month session high of $42,550 on Sunday.

Buying momentum, however, fizzled out, and soon after the peak, bitcoin reversed course and ended the day in negative territory, down by less than 1% on Sunday. Still, bitcoin was in the green for the weekend, as it closed higher by roughly 1.50%.

The world’s biggest digital asset on Monday is trading right above $40,000, gyrating near $39,500 per coin, lower by about 4% on the day. Today’s decline places bitcoin in the upper end of a trading range that’s been narrating bitcoin’s moves for the past couple of months.

Despite the relatively weak opening of trading for the month of August, bitcoin ended July trading with a gain of over 20%. The positive performance over the last month ended a losing streak of three consecutive months, overshadowed by regulatory scrutiny, mining concerns and overall bleak short-term outlook.

Ether Soars Over 7%

Ether, the second-biggest cryptocurrency, is also pressured and to the downside on Monday. The Ethereum coin is trading lower by about 3.5% today, as investors appear risk-averse as they enter August crypto action. On Sunday, ether kickstarted the month by adding more than 7% to its price as it closed the day at a 1.5-month high of $2,700 per coin.

For the month of July, Ether has realized a gain of over 11%, snapping two straight months of losses.

The early August pullback comes after a strong bullish action lifted bitcoin’s price by 42% over the last 10 trading days of July. For ether, the same period resulted in a gain of 38% as market optimism spread across major digital assets.

Crypto circles are expecting a major software upgrade this week to the Ethereum network. The upgrade, code named London, aims to trim the pace at which the supply of Ether coins grows.

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