This week saw the first Federal Reserve meeting of the year, bringing some volatility to the cryptocurrency market. Nevertheless, the weekly candlestick for Bitcoin remains green with a longer upper wick. Today, we will again go through Bitcoin charts together and try to estimate where the price might move in the coming period.
As always, I’ll start with the hourly chart. On Monday, there was a change in Google’s search engine conditions, now allowing advertisements in the U.S. for financial products of funds that have cryptocurrencies as underlying assets. This condition seems tailor-made for the newly approved spot ETFs. However, the price responded with a decent increase within two hours (after all, Google processes 8.55 billion searches daily, making it a potent influencer in the cryptocurrency market).
On Tuesday, financial results of technology companies such as Microsoft and the aforementioned Google (Alphabet) were announced. Despite better-than-expected results, there was a significant decline in their stocks, and the price of Bitcoin also fell until Wednesday. Traditionally, both before and after the Fed meeting, market volatility was evident, and Jerome Powell’s hawkish speech quickly pushed prices down. On Thursday, the price climbed back to the 43,000 USD mark.
On Friday, unexpectedly strong job market growth reports came from the United States. This propelled the U.S. Dollar Index (DXY) upward and briefly pushed Bitcoin down (BTC and DXY often exhibit a negative correlation). However, the expiration of Bitcoin options worth 1 billion dollars likely helped prevent a steep decline and brought the price back to 43,000 USD. That’s where we closed on the CME exchange on Friday. Currently, the price is hovering around 42,700 USD.
Other Acticles
Bitcoin Dips Below $57K Ahead of Fed Meeting: Market Braces for Impact
In a week marked by nervous anticipation, Bitcoin has once again dipped below the critical $60,000 mark as traders and…
The four-hour chart forms a flag pattern
Now let’s take a look at a longer time frame. On the four-hour chart, a forming flag pattern can be identified. In this interpretation, it appears more as a bearish signal, where the key support might be found around 39,000 USD. I’ve also marked the 50-day moving average on the chart, which is our current position, and the support in the form of the 50-day exponential moving average, which could potentially hold us around 42,100 USD.
On the contrary, the daily chart is forming a bullish pattern in the shape of an inverted Head and Shoulders. Upon confirmation of this pattern, the potential target is around 48,650 USD. Of course, today’s candlestick is crucial. Many analysts anticipate a slight increase and then a retest of the level around 43,200 USD. Only after that, a rise towards the aforementioned target might follow.
The weekly chart forms a green candle, confirming the previous one
Last week managed to close in the shape of a Hammer, indicating a clear bullish signal. This week’s candle is also green so far. If the bears wanted to demonstrate their strength, the candle this week would have to close below 42,000 USD. This would create a Shooting Star pattern, sending a bearish signal to the market.
Furthermore, the MACD still indicates a potential bearish crossover, which would confirm the potential candlestick pattern. In the event of a decline, support can be expected around 40,000 USD, where the current 100-day exponential moving average resides, along with being a historical and psychological level. Another significant support could be found around 36,000 USD, where we have the 61.80% Fibonacci retracement. Conversely, in the case of further upward movement, testing up to 50,000 USD can be anticipated.
What will come first – a decline or an increase in Bitcoin
The question of whether a decline or growth in Bitcoin will come first depends on many factors, and predicting market movements precisely can be challenging. Our analysis suggests that there are several factors that could influence the movement of the Bitcoin price.
In the short term, we are focusing on the four-hour chart, observing the confirmation of patterns and a potential breakthrough to the downside. If this occurs, we expect a decline below 40,000 USD. For the longer term, we are optimistic and believe that Bitcoin may reach new all-time highs (ATH) this year.
Our opinion highlights the potential impact of factors such as a possible decrease in Bitcoin value before the halving, the shift of speculators to Ethereum, and the potential sale of Bitcoins by Tesla, which could create market panic.
From the monthly chart, you are estimating possible liquidation of positions by professional traders around specific price levels. Both directions offer interesting liquidity.
Overall, it is crucial to consider all factors and monitor current events in the market. The cryptocurrency market can be susceptible to rapid and unexpected changes, so it is important to be flexible and responsive to current conditions.
