The Bitcoin (BTC) price appears to be ready to be tested at $ 30k, as traders continued to pull away from bullish prices in the wake of a bearish technical pattern.

A structure called a symmetrical triangle is formed when an asset oscillates between two converging trend lines.

With this, the asset bounces after testing the lower trend line in the triangle as support and bounces when the upper trend line is seen as resistance. Finally, it breaks through the area in the direction of its previous trend and shrinks to the maximum distance between the upper and lower trend line of the triangle.

Why $ 30,000?
Bitcoin moved into a triangular consolidation pattern until it finally broke below the bottom line of the structure. As a result, the likelihood that the major cryptocurrency will change its negative target of around $ 30,000 has increased. This is partly because the maximum height of the structure was less than $ 2,550, and deducting the breakout point (about $ 33,878) lowers the target price to around $ 31,308.

Bitcoin formed a series of bearish and bullish reversal patterns as it melted between a price range of $ 30,000 to $ 40,000. Source: TradingView
The bearish sentiment also emerged when Bitcoin tested $ 32,334 as temporary support early in the London session on Thursday. A small rebound followed, resulting in the price exceeding $ 32,600. However, the return lacked extra confidence in favor of gains due to the bearish discrepancy between prices and volumes, indicating that Bitcoin may resume its downward trend.

Peter Brandt, CEO of Factor LLC, a global trading company, also suggested a fall of around $ 30,000 dollars, albeit using a different index. A veteran trader discovered bitcoin / dollar exchange rates in a rectangular pattern, a price block that recently kept bitcoin in a midway battle against bias.

Bitcoin is stuck inside a rectangle. Source: Twitter / Peter Brandt
Price is traded halfway through the rectangle on a pullback from the upper trendline resistance. This move usually pushes the BTC / USD spot price down to the lowest support level in the rectangle, which coincides with $ 30,000.

The fundamental
Unfavorable macroeconomic fundamentals partly triggered the recent fall in bitcoin prices.

The key minutes of the Federal Reserve’s meeting were released Wednesday at 2:30 p.m. As expected, US Federal Reserve officials indicated that they could end their support for the economy sooner than expected.

“Many participants said that they expected conditions to start slowing down the pace of asset purchases somewhat earlier than they had expected at previous meetings in light of the data that came in,” the minutes said.

In a new dot chart, the Fed predicts an interest rate increase in 2023. Source: Bloomberg
Bitcoin generally benefits from loose monetary policy.

The cryptocurrency jumped from $ 3,858 in March 2020 to $ 65,000 in mid-April 2021, when the Federal Reserve lowered its base lending rates to near zero, affecting the purchasing power of the US dollar and began buying government and mortgage loans. Securities with an interest rate of 120 billion dollars per month, which gives a lower return.

To be clear, the central bank’s inflation buying programs are generating inflationary pressures because they expect to make money on some of the government’s deficit expenditures. These purchases tend to inflate stocks and fixed income investments. Combined with cheaper lending, bad money programs increase the cash flow in the system, and strengthen the narrative of “Bitcoin’s superior value value” over an unlimited supply of dollars.

As a result, investors began to look at higher risk assets in safe havens, including bitcoin, in search of better returns. But as fears rose in the markets over the contraction of the Federal Reserve, bitcoin began to fall. On Wednesday, the decline in the value of Bitcoin came from more than $ 35,000 after the minutes of the central bank meeting were announced.

Bitcoin reacts negatively to the minutes of the Fed meeting. Source: TradingView
John Miller, a financial analyst with Search Alpha, noted that the Fed’s hawkish ideas negate Chairman Jerome Powell’s goal of securing a secure long-term settlement. Also in the last minutes, Powell described the US economic recovery as weak, referring to weak job growth in June.

“The Fed’s adaptive balance sheet policy will continue to maintain increased liquidity in the banking system and support asset prices,” he wrote.

Source: CoinTelegraph

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