Bitcoin price at risk of $ 30,000 retest after falling triangle

Bitcoin’s price (BTC) appears poised to retest $ 30,000 as traders continue to bounce off bullish bets after a bearish technical pattern.

The structure known as a symmetrical triangle forms when the asset oscillates between two converging trendlines.

In doing so, the asset recovers after testing the lower trendline of the triangle as support and returns as resistance considering the upper trendline. It eventually broke out of range in the direction of the previous trend and fell the maximum distance between the triangle’s upper and lower trend lines.

Why $ 30,000?

Bitcoin trended within a similar triangle-like consolidation pattern until it eventually broke below the structure’s bottom trendline. As a result, the leading cryptocurrency is more likely to move its declining target near $ 30,000. That’s partly because the structure’s max height is $ 2,550 and the breakout point (~ 33,878) would bring the target price close to $ 31.308.

A bearish setup also occurred when Bitcoin tested $ 32,334 as preliminary support during the early London session of the week. A slight rally followed, bringing the price above $ 32,600. However, the rebound lacks additional bullish confidence due to the decreasing divergence between price and volume, suggesting that Bitcoin may continue its downtrend.

Peter Brandt, CEO of Factor LLC – also a global trading company proposals lowered to $ 30,000, albeit with a different indicator. The veteran trader discovered the BTC / USD exchange rate in a rectangular pattern, a price block that recently kept Bitcoin in a medium-term bias conflict.

Price was trading in the middle of the rectangle as it pulled back from its trendline resistance. Such a move usually causes the BTC / USD spot rate to drop to the lowest rectangular support, which coincides with $ 30,000.

Basic principles

The unsupported macro fundamentals partially fueled Bitcoin’s recent decline.

The first of these is the minutes of the Federal Reserve meeting on Wednesday at around 2:30 p.m. EST. As expected, US Federal Reserve officials believe they could withdraw their support for the economy sooner than expected.

“Many participants indicated that they expect the conditions to slow the pace of asset purchases to be met sooner than they had expected at previous meetings based on the incoming data,” written transcript.

Bitcoin tends to benefit from loose monetary policy.

The cryptocurrency rebounded from a low of just $ 3,858 in March 2020 to a high of $ 65,000 in mid-April 2021 when the Fed cut its benchmark interest rate to near zero, impacting the health of the cryptocurrency buying government bonds and mortgage-backed securities for 120 Billions of dollars a month, which is driving down returns.

To be clear, the central banks’ asset purchase programs create inflationary pressures as they expect to monetize some of the government deficits. Such purchases tend to increase the price of stocks and fixed income investments. Coupled with cheaper lending, monetary easing programs increase fiat liquidity in the system and fuel the narrative of Bitcoin’s “superior store of value” against an unlimited supply of dollars.

As a result, investors turned to riskier safe havens, including Bitcoin, in search of better returns. However, shortly after concerns about a decline in markets from the Fed, Bitcoin began to fall. On Wednesday, Bitcoin fell over $ 35,000 shortly after the central bank’s minutes were released.

John Miller, a financial analyst associated with Seeking Alpha, noted that the Fed’s restrictive stance undermines Chairman Jerome Powell’s goal of maintaining a stable currency over the long term. In the past few minutes, Powell described the US economic recovery as weak and cited weak employment growth in June.

“The Fed’s balance sheet policy will continue to support banking system liquidity and asset prices,” Miller wrote.

“Cryptocurrencies and crypto assets with strong value drivers such as Bitcoin will excel in this environment.”

Alexey Veledinskii, product owner at the spot crypto and derivatives exchange Digitex Ltd, predicts Bitcoin will hold $ 30,000 due to ongoing inflation fears. He says:

“The key support at $ 30,000 could easily be canceled out with a jump to more ambitious price levels towards $ 50,000 to $ 70,000 in the medium to long term.”