Bitcoin price flaunts possible falling bullish wedge revival amid fears of decoupling from traditional markets


  • Bitcoin price is moving closer to validating a potential falling wedge pattern in the wake of a drop to $19,543.
  • The biggest cryptocurrency risks decoupling from traditional markets due to low forward guidance from the US Federal Reserve.
  • The IOMAP model cites increasing resistance of around $21,000, which may delay or sabotage further recovery.

Bitcoin price is up by 1.6% over the last 24 hours against a backdrop of 7.0% in cumulative losses across seven days. The pioneer cryptocurrency is trying to arrest last week's downtrend, which saw its leg tag $19,543 on the downside. Possibly, a daily close above $20,000 will push BTC higher and authenticate a falling wedge pattern breakout with eyes set on $23,000.

Why Bitcoin price may face increased resistance in the months ahead

The flagship cryptocurrency may be forced to deal with increased volatility in upcoming months as it decouples from traditional markets. The lack of or lowered forward guidance from the United States Federal Reserve implies that investors will have to rely on market data – much like the regulatory body – as far as interest rate hikes are concerned.

During the annual Jackson Hole Symposium last week, the Fed's Chair, Jerome Powell, reckoned that the next hike would depend on economic data. His insight came before September's expected FOMC (Federal Open Market Committee) meeting on monetary policy.

"Volatility is unlikely to go away in the coming months as the Fed is preparing to step up the process of shrinking its massive $9 trillion balance sheet or the so-called quantitative tightening in September," a newsletter sent by Kaiko researchers on Monday read.

High volatility may take center stage for Bitcoin price in the months ahead as rising interest rates put pressure on risky assets like BTC.

Read moreWall Street believes Bitcoin price hit its bottom after key move by US Federal Reserve

Bitcoin price is on the cusp of triggering a breakout

A wedge pattern on the daily chart is parading a potential bullish breakout. However, the move largely depends on the Bitcoin price's ability to crack through the upper trend line, as illustrated in the chart.

 BTC/USD daily chart

BTC/USD daily chart

Traders must show restraint ascribing to the Moving Average Convergence Divergence (MACD) indicator position below the mean line. The 12-day Exponential Moving Average (EMA) is required to cross above the 26-day EMA – to reinforce the climb to $23,000.

 Bitcoin IOMAP chart

Bitcoin IOMAP chart

It is worth mentioning that Bitcoin price sits on top of solid support between $19,482 and $20,089. ITB (IntoTheBlock) shows approximately 798,500 addresses previously purchased, roughly 457,900 BTC in the range. Holders within this region are likely to fight potential declines, leaving Bitcoin price's path of the least resistance on the upside.

On the other hand, a recovery above $21,000 may stall between $20,763 and $21,370. The roughly 800,000 addresses that bought around 386 BTC in the range may choose to liquidate, thus dampening the uptrend. A break above this zone might be a zero-sum game, citing resistance at $21,590 and $22,978.

Read moreBitcoin Price Prediction: September's Vengeful Decline

 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Crypto Today: Bitcoin crumbles under German government transfers, Ethereum and Ripple erase gains

Crypto Today: Bitcoin crumbles under German government transfers, Ethereum and Ripple erase gains

Bitcoin trades below $57,100 on Thursday as German government transfers continue, $76 million BTC moved to exchanges. Ethereum trades near $3,100 ahead of the upcoming SEC decision on the Spot Ethereum ETF. 

More Cryptocurrencies News

Ripple traders take over $75 million in losses in July, XRP drops below key support

Ripple traders take over $75 million in losses in July, XRP drops below key support

Ripple (XRP) price is under fresh selling pressure and tests key support at the June 7 low of $0.4508 on Thursday as whales are likely capitulating, according to on-chain data.

More Ripple News

Bitcoin price declines as supply on exchanges rises

Bitcoin price declines as supply on exchanges rises

Bitcoin faced rejection at the daily resistance level of $63,956 on Monday, resulting in a 4.2% decline over the next two days. BTC’s price extends its downward move and falls below $58,000 on Thursday, adding more than 4% losses in the day. 

More Bitcoin News

Worldcoin is poised for 17% rally as as technical indicators signal bullish momentum

Worldcoin is poised for 17% rally as as technical indicators signal bullish momentum

Worldcoin price finds support and bounces 9% from the weekly support level around $2.183. Technical analysis shows that WLD has formed a bullish divergence on a momentum indicator.

More Worldcoin News

Bitcoin: BTC price correction could end in July, according to seasonal data

Bitcoin: BTC price correction could end in July, according to seasonal data

Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.

Read full analysis

BTC

ETH

XRP