Bitcoin (Bitcoin) The bulls should look for a cover, at least as far as charting techniques are concerned.
Flagship cryptocurrency Prices continue to fall Entering a new weekly trading session, after a drop of about 10% during the intraday session, it hit $32,105 before the London market opened. In doing so, it increases the likelihood of retesting its quarterly low of $30,000, whether it is a bearish breakout or a bullish pullback.
But as traders struggled to deal with the ongoing mid-term conflict of bias in the Bitcoin market, a classic technical model emerged to boost the bearish outlook.
The cup turned
Independent market analyst Keith Wareing found that the so-called “reverse cup handle” structure indicates that the Bitcoin market will see a long-term downward price correction in the future.In detail, when an asset forms a large crescent shape, as it rises and pulls back down, the pattern will develop, and then Not so extreme upward rebound.
Trader’s Look Inverted cup handle pattern As a reminder for them to open a short position to target a deeper level. In this case, the most extreme bearish target is determined by measuring the distance between the top of the cup and the breakout level of the pattern.
At the same time, traders usually find a breakout level when the price breaks from the handle pattern to the downside accompanied by a higher volume.
According to the chart provided by Wareing, Bitcoin’s recent price movement-from a skyrocket to nearly 65,000 USD, then plummeting to 30,000 USD, and retreating to 40,000 USD-almost checked all the boxes that confirmed the existence of the inverted cup handle structure.
In addition to this, Bitcoin prices are still waiting for a bearish breakout.
— Keith Walling (@officiallykeith) June 21, 2021
The frustrating Bitcoin setting appeared in traders’ evaluation of the Federal Reserve Board’s Hawks reversal Regarding interest rates and inflation. Last week, the Fed hinted that it might raise its benchmark lending rate by the end of 2023 instead of before the end of 2024 to curb rising inflation.
James Brad, one of the Fed officials, separately stated on Friday that the Fed may raise interest rates as early as 2022.
Federal Reserve Chairman Jerome Powell also stated at a press conference on Wednesday that his office will start discussing the reduction of the $120 billion monthly asset purchase plan starting in March 2020.
Due to the Fed’s hawkish tone, Bitcoin and other pandemic winners, including gold and the Wall Street stock index, fell at the same time. At the same time, the U.S. dollar index, which measures the strength of the U.S. dollar against major foreign currencies, rose The rise to a two-month high indicates that investor demand for cash is rekindling.
More bearish prospects appear
The latest Bitcoin price plunge has also been hinted from reports China’s pressure is increasing Encrypted mines in the area. State-backed newspaper “Global Times” Report The Sichuan authorities ordered the miners to stop operations.
Sichuan is home to the second largest cryptocurrency mining community in China. The Global Times pointed out that the latest ban means that 90% of China’s mining capacity, which accounts for 75% of global computing supply, may have gone offline.
After the Chinese crackdown, Bitcoin’s hash rate dropped to its November 2020 low.
Jeffrey Ross, founder and CEO of Vailshire Capital Management, Say He expects Bitcoin to remain weak for the next one to three weeks, worrying about the end of liquidation by Chinese miners.
Nevertheless, he added that as long as the key technical targets of cryptocurrency remain above the 12-month and 48-month moving averages, its macro outlook remains bullish.
Bitcoin’s 48-month moving average is currently around $13,000.