Bitcoin unable to gain ground amid Powell’s harsh rhetoric
August 28, 2023 9:28 pm
Bitcoin continues to trade in a flat pattern following its latest downward swing. Over the past year and a half, Bitcoin has adhered to a consistent pattern: a strong decline or ascent followed by a period of flat movement lasting several weeks or months. Two weeks ago, we witnessed a fresh downward dip, and for the past two weeks, we’ve observed a flat phase. However, on the 24-hour timeframe, the price has solidified below the ascending trend line, thus intensifying the bearish prospects for Bitcoin. A strong support zone remains at $24,350 – $25,211. This range could potentially prevent further declines, but any growth would require catalysts or at least demand. As of now, neither seems evident. Consequently, breaching this mentioned range significantly heightens the likelihood of an even greater decline for Bitcoin, possibly down to the $15,500 level, where last year’s rally commenced.
During last Friday’s symposium at Jackson Hole, Jerome Powell took the stage. His rhetoric once again revolved around the tightening of monetary policy if inflation demands it. Recall that the previous report revealed an acceleration of inflation to 3.2%, prompting an immediate response from the Fed chief, who reiterated that the central goal remains combating inflation. For Bitcoin, which has diligently disregarded any tightening of the Fed’s monetary policy over the past year, this remains disconcerting news. Many traders were banking on the Fed signaling an imminent policy softening by year-end. However, the current trajectory seems to point towards a rate increase to 5.75%, with this level being sustained for a period of time.
Demand for deposits and treasury bonds is on the rise as yields for these investment instruments increase. Consequently, the demand for cryptocurrencies remains stagnant. And when demand doesn’t surge, neither does Bitcoin. As we’ve previously highlighted, the entire year-long upward trend could merely be a correction against a larger overarching downtrend. We don’t align with the perspective of many experts, who predict almost perpetual growth for Bitcoin. We also don’t subscribe to the notion that the upcoming halving next year is destined to lead to a twofold increase, simply because it has followed that pattern in the past. Our recommendation is to continue relying on technical analysis, which offers the best visualization of market dynamics.
On the 24-hour timeframe, Bitcoin’s descent persists, in line with our expectations. The price has descended to the level of $25,211, a pivotal support level. For new selling pressures to materialize, breaching the range of $24,350 – $25,211 is necessary, potentially driving the decline even further. The target is $19,607. We deem this entirely feasible since the ascending trendline has been surpassed. Initiating purchases can be contemplated upon a clear rebound from the $24,350 – $25,211 range.
The material has been provided by InstaForex Company – www.instaforex.com
Bitcoin continues to trade in a flat pattern following its latest downward swing. Over the past year and a half, Bitcoin has adhered to a consistent pattern: a strong decline or ascent followed by a period of flat movement lasting several weeks or months. Two weeks ago, we witnessed a fresh downward dip, and for the past two weeks, we’ve observed a flat phase. However, on the 24-hour timeframe, the price has solidified below the ascending trend line, thus intensifying the bearish prospects for Bitcoin. A strong support zone remains at $24,350 – $25,211. This range could potentially prevent further declines, but any growth would require catalysts or at least demand. As of now, neither seems evident. Consequently, breaching this mentioned range significantly heightens the likelihood of an even greater decline for Bitcoin, possibly down to the $15,500 level, where last year’s rally commenced.
During last Friday’s symposium at Jackson Hole, Jerome Powell took the stage. His rhetoric once again revolved around the tightening of monetary policy if inflation demands it. Recall that the previous report revealed an acceleration of inflation to 3.2%, prompting an immediate response from the Fed chief, who reiterated that the central goal remains combating inflation. For Bitcoin, which has diligently disregarded any tightening of the Fed’s monetary policy over the past year, this remains disconcerting news. Many traders were banking on the Fed signaling an imminent policy softening by year-end. However, the current trajectory seems to point towards a rate increase to 5.75%, with this level being sustained for a period of time.
Demand for deposits and treasury bonds is on the rise as yields for these investment instruments increase. Consequently, the demand for cryptocurrencies remains stagnant. And when demand doesn’t surge, neither does Bitcoin. As we’ve previously highlighted, the entire year-long upward trend could merely be a correction against a larger overarching downtrend. We don’t align with the perspective of many experts, who predict almost perpetual growth for Bitcoin. We also don’t subscribe to the notion that the upcoming halving next year is destined to lead to a twofold increase, simply because it has followed that pattern in the past. Our recommendation is to continue relying on technical analysis, which offers the best visualization of market dynamics.
On the 24-hour timeframe, Bitcoin’s descent persists, in line with our expectations. The price has descended to the level of $25,211, a pivotal support level. For new selling pressures to materialize, breaching the range of $24,350 – $25,211 is necessary, potentially driving the decline even further. The target is $19,607. We deem this entirely feasible since the ascending trendline has been surpassed. Initiating purchases can be contemplated upon a clear rebound from the $24,350 – $25,211 range.
The material has been provided by InstaForex Company – www.instaforex.com
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