Bitcoin Forecast:
- Bitcoin[1] remains vulnerable to economic data, FOMC[2] minutes loom
- BTC[3]/USD[4] consolidates between key technical support and resistance
- Cryptocurrency benefit from the US holiday but face a tough week ahead
Bitcoin prices lack momentum ahead of FOMC
After a tumultuous Q2, Bitcoin has entered Q3 with lackluster motion as prices continue to consolidate around the $20,000 mark.
Since the beginning of the year, heightened geopolitical risks[5] and a shift in sentiment (caused by rate hikes, war and a gloomy economic outlook) has weighed on digital assets, driving Bitcoin back towards levels last seen in December 2020.
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As illustrated on the weekly chart below, BTC/USD has often experienced large price swings, gaining traction once a clear direction has formed. By using Fibonacci levels[7] from historical moves, both technical and psychological levels have provided support and resistance[8] over time, often assisting in fueling momentum once price action breaks through those levels.
After falling below $18,000 on June 18th, bears were able to drive prices to $17,592 in an effort to retest the December 2020 low at $17,569. Failure to break below this level allowed buyers to drive prices higher before running into a wall of resistance at $21,000. While bulls and bears continue to trade side-ways, the weekly RSI (Relative Strength Index) has fallen below 30, threatening oversold territory.
Bitcoin (BTC/USD) Weekly Chart
Source: TradingView, Chart by Tammy Da Costa[9]
With a negative correlation existing between BTC/USD[10] and interest rates[11], mounting price pressures and an influx of stimulus (throughout the Covid-19 pandemic) has forced the Federal Reserve
