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Forex forums - Yep, Bitcoin Weekly Chart Is Troubling AF, Eyes $20,000-Retest

Forex forums – Yep, Bitcoin Weekly Chart Is Troubling AF, Eyes $20,000-Retest

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FOREX FORUMS – Bitcoin is bracing for a deeper breakdown towards $20,000.

The flagship cryptocurrency declined towards $31,000 on Monday for the sixth time in six weeks, eyeing an extended move towards $30,000, the level it tested on May 19 before recovering to above $40,000. Since then, the BTC/USD exchange rate remains rangebound in the range defined by $30,000 as ultimate support and $42,000 as an equally strong resistance.

Meanwhile, the $30,000-support level has more bullish backings in the form of a 50-week simple moving average (50-week SMA; the blue wave). It does not mean the double-layered price floor would stand even the harshest of the bearish pressures.

Nonetheless, they hold well so far even as Bitcoin intends to extend its bearish correction from its circa $65,000 record high.

Fundamentals do not support bullish resilience.

Last Wednesday, the Federal Reserve said after its official policy meeting that it would hike its benchmark lending rates from the current 0-0.25% range, sometimes by the end of 2023. The US central bank turned hawkish on its yearlong expansionary policy after spotting two unnatural, consecutive spikes in the consumer price index.

In April, the inflation metric spiked to 4.2%. And, in the next month, it surged to 5%, almost 3% above the Fed’s intended inflation rate.

Fed’s announcement calmed investors about a potential rise in inflation. That allowed them to move away from hedging assets like stocks, gold, and Bitcoin and turn to cash for their short-term, low-risk safe-haven appetite. The US dollar index jumped to its two-month high last week as a result.

The macroeconomic development appears as a bottleneck to Bitcoin’s bullish dreams. Therefore, it also serves as a tailwind to the cryptocurrency’s bearish bias below $30,000.

The 200-week SMA and the $30,000 level appear as the line of defense against bears. Once broken, it is very likely for Bitcoin to continue its sell-off until $20,000.

In doing so, the BTC/USD exchange rate might target psychological support levels like $27,000, $25,000, and $22,000 as potential rebound points. Meanwhile, the Bitcoin price appears to be forming a bearish head and shoulder pattern on the weekly chart. The structure’s technical target is also near $20,000 — breakdown equals the structure’s maximum height.





date : 2024-02-07 17:54:01

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