Bitcoin price likely to fall 5% despite Powell's bullish thesis for Bitcoin
|- Bitcoin price continues to trade horizontally with technical indicators showing limited upside potential.
- BTC could drop 5% after multi-week consolidation below the $43,750 blockade.
- The bearish thesis will be invalidated if the price breaks and closes above $46,000.
Appearing on Monday, Federal Reserve chair Jerome Powell expressed worrisome comments about the US government's unsustainable path.
Powell underlines a bullish thesis for Bitcoin
Fed chair Jerome Powell said the US is on an "unsustainable path" as debt will outpace economic growth. In his opinion, investors will soon question the government's ability to pay its debt, which will push them towards dumping the US dollar in favor of a hedge. In such a turn of events, Bitcoin would pass as the best candidate for this hedge.
Jerome Powell on the US national debt:
— The ₿itcoin Therapist (@TheBTCTherapist) February 5, 2024
• We’re on an unsustainable path
• Debt is growing faster than the economy
• We’re borrowing from future generations
Projected debt in 30 years: $144 Trillion
We need #Bitcoin now more than ever pic.twitter.com/DUaP7wNA0w
Jerome Powell on the US national debt:
— The ₿itcoin Therapist (@TheBTCTherapist) February 5, 2024
• We’re on an unsustainable path
• Debt is growing faster than the economy
• We’re borrowing from future generations
Projected debt in 30 years: $144 Trillion
We need #Bitcoin now more than ever pic.twitter.com/DUaP7wNA0w
Bitcoin price outlook with a possible 5% drop in the works
Bitcoin price remains range-bound, consolidating between the centerline and the upper band of the Bollinger indicator at $41,882 and $44,182. The two levels appear to be coming together, a move that often precipitates an impulsive or rash move soon.
The Relative Strength Index (RSI) is bearish and could soon break below the yellow band (signal line). Tilting the odds further in favor of the bears, the Moving Average Convergence Divergence (MACD) also appears subdued below its histogram bars and could soon fall in negative territory. The Awesome Oscillators (AO) are also flattened out, a sign of dissipating bullish presence.
With this outlook, Bitcoin price could fall 5% to find support offered by the confluence between the 100-day Simple Moving Average (SMA) and the horizontal line at $40,651. Below this level, BTC could dip into the demand zone between $38,496 and $39,582.
BTC/USDT 1-day chart
On the other hand, increased buying pressure could see Bitcoin price overcome the resistance due to the upper band of the Bollinger indicator at $44,184. This could see BTC climb to $48,000, or in a highly bullish case, tag $50,000. Such a move would denote a 20% climb above current levels.
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