Bitcoin analysis: Will the interest rate solution give a new boost to the price?
After according to the data of Coinmarketrate.com last week Bitcoin first rehearsed the exit from the trading range of the previous weeks and rose to the last potential reversal mark at the level of 24,291 US dollars, subsequently it experienced a dynamic counter movement.
The so-called “bearish takeover” formed on the 4-hour chart, which initiated the resumption of the sell-off on the part of the bears. At the last second, activity re-emerged on the sellers’ side, and in the following days the BTC price returned to the trading range between $21,900 and $19,000.
During yesterday’s trading, Bitcoin rolled back to the cross horizontal support and the gold pocket of the last trading session in the area of $21,779, before the oncoming movement began. Today it has started its recovery, and is above the $22k mark.
In the flow of tech giants
Thus, the cryptocurrency once again followed the price trend of the Nasdaq technology index.
In anticipation of quarterly data from Microsoft and Alphabet, as well as the announcement of the Fed’s decision on key interest rates on Wednesday evening, stock indexes in the United States traded sideways until the close.
Only after 22:00 during the publication of the report, the first recovery movement occurred, which was able to stabilize the price of BTC for a while and, in particular, the price of Ethereum (ETH).
Before the interest rate decision at 20:00 (CET), the Bitcoin price should move in the USD 1,000 trading range between yesterday’s daily low at USD 20,700 and the resistance area between USD 21,900 and USD 22,200.
Investors are watching the interest rate decision with bated breath
If the expected 75 basis point rate hike turns out to be lower, cryptocurrency prices are likely to jump significantly to the upside as an initial reaction.
If, on the other hand, the Fed raises the key interest rate by 100 basis points or more, then a clear bullish reaction of the US dollar is likely. As a result, the financial market as a whole may pull down again and weaken the trend.
Therefore, volatility is likely to remain high in the coming trading days.
Further price impulses are expected, in particular, from the announcement of gross domestic product in the United States today, Thursday. You can find out what dates may be relevant for Bitcoin and cryptocurrencies during trading this week from the reports of sector analysts.
What do the indicators say?
The fear and greed index has returned a bit in the last few days, but at 28 it remains above the extreme range, reflecting the strong fear of investors.
The sell-off in the last few trading days has again somewhat clouded the situation for the indicators. Although the RSI, as well as the MACD indicator on the 4-hour range, were able to completely reduce overbought from the previous week and slipped into the oversold zone, both indicators now offer space for resuming the upward movement. The MACD is on the verge of forming a new buy signal.
On the other hand, the RSI, as well as the MACD indicator, continue to decline and threaten to form new sell signals if the price remains weak. From the bulls’ point of view, this must be avoided.
However, as long as Bitcoin does not break the mark below $20,500 at the daily closing price, there is a possibility of resuming an upward growth attempt.
Bitcoin Bullish Scenario
The bulls again failed to initiate a sustained price break in the direction of $26,170 and beyond.
The fall back into the trading range again occurred with a large volume of sales.
However, as a positive point, it can be noted that Bitcoin has found a short-term bottom at the level of a short-term breakout of $20,779.
Yesterday’s counter movement back to the $22,500 area shows that the bulls are still trying to lift Bitcoin back to the upper limit of the range at $22,900.
The second largest cryptocurrency Ethereum (ETH) has once again started a more dynamic and bullish counter movement. While the price of Ether can now use EMA50 as support, the average line of the last 50 trading days for Bitcoin continues to act as resistance around $23,200. In the short term, the area around 21,900 remains very relevant
In the short term, the bulls should try to return the BTC price above the $22,600 mark in order to subsequently make another attempt to break into the $23,300 area.
If the bulls manage to stabilize the price above 22,128 in the coming days and Bitcoin is able to break back above the strong resistance levels of EMA50, EMA200 and supertrend, we can expect a new growth towards the red resistance area.
If the level of the 78 Fibonacci retracement at USD 22.849 is subsequently also restored, you can plan a hike to USD 23.289.
Only if Bitcoin can sustainably overcome the red resistance zone, the next targets for investors will be the resistance levels at $23,777 and $24,291.
Space for further upward movement
If Bitcoin is able to develop sufficient price momentum this time, it can be expected to quickly overcome the $25,498 level in the direction of $26,170.
Nevertheless, 61 Fibonacci retracement at USD 26,734 will become really relevant. Here, the first attempt is likely to lead to an increase in profit-taking on the part of buyers.
Having overcome the 61 Fibonacci retracement level without a strong price pullback below $24,291, the bulls will target the orange zone between $27,696 and $28,104.
If there is no price reversal back to the side at the level of 28,607, and the bears remain abstemious, the BTC should quickly pass to $29,256 or even $29,975.
Thus, it will be difficult to break the psychologically important $30,000 mark on the first attempt.
Maximum “Bullish” price Targets for Bitcoin
If the Bitcoin price can stabilize above this price level in the coming weeks, then the maximum bullish price targets at $31,750 and $32,443 will be in focus
The Bitcoin price below 32,443 should still be considered only as a corrective recovery movement. The zone between $32,433 and $32,938 is crucial here. Since the moving average for the last 200 days (EMA200), currently at the level of 32.718 USD, also passes in this range, the breakdown of the bearish structure of the market is possible only if this zone is restored.
In the last few trading days, the bears have shown their strength again and pushed the Bitcoin price back to the $20,779 mark.
Here, the sellers’ side ran out of strength for a while, and they returned to the sale below the $20k mark.
If the sellers’ side is able to lower the BTC price below $ 22,446 again in the coming days, we can expect a new sale.
But, if BTC refuses the support level of $ 20,779, the last possible reversal level of the bulls is expected at around 20,478. If the bulls remain abstemious here, the area around the psychologically important $20k mark will again be in the spotlight.
The probability of new annual lows increases markedly
If this support is also dynamically broken, the sale will immediately spread to the yellow support zone between $19,150 and $18,950.
This also significantly increases the likelihood of a bearish trend movement.
A steady rejection of the $18,950 level activates new price targets at $18,604, and especially at $17,909. Here, the bulls will have to do everything to stabilize BTC.
If the bear pressure remains high, and the minimum of the year is at the level of $17,567. if it is reached and broken, we should expect a price reduction to $ 16,180.
The focus of attention is on the maximum price target for a decrease
The continued weakness in the traditional financial market in the coming trading weeks will strengthen the correction of the cryptocurrency.
If the $16.180 level is also left by the end of the day, the green support area between $14.837 and $13.858 will become the maximum bearish target.
Investors should first wait for the interest rate decision and the subsequent press conference before making new investments. Experience shows that significantly higher volatility should be expected in the period from 20:00 to 22:00.