Key breakout to accelerate Bitcoin weakness
Bitcoin trades at above $19,000 in a bear market and support area
200-day moving average joined resistance for Bitcoin
A breakout of the inside bar pattern could accelerate bear weakness
Bitcoin BTC/USD is trading at 19,580. At the current price, the world’s largest cryptocurrency sits at support. However, Bitcoin may crash below the support as more bearish indicators emerge. Fundamentals and market sentiment also weigh on the price of Bitcoin.
The price of Bitcoin has been so far pegged on the state of the economy. Rising inflation is a bear trigger for Bitcoin. Inflation ignites faster action by central banks to tighten policy. On Thursday, data showed that the Fed’s key inflation gauge rose by 4.7% in May. Despite being lower than estimates of 4.8%, the rate was at levels only seen in the 1980s.
In its comments, the Fed has hinted at faster rate hikes to tame the costly inflation. Markets anticipate up to a 75 basis point rate hike in July. The faster rate action would be bearish for Bitcoin. Current technical indicators suggest another bear leg is on the horizon.
The 200-day moving average offers Bitcoin resistance for the first time
Source – TradingView
The weekly chart gives the long-term trend of Bitcoin. The 200-day moving average joined resistance for the cryptocurrency at key support. An RSI reading of 25 may suggest the cryptocurrency is oversold. Nonetheless, this does not mean the bear’s weakness is over. A short-term appreciation in price may be met with a sharp downturn.
Bitcoin also forms an inside bar pattern at the key support. We need to see whether the weekly candlestick breaks below. A breakout of the inside bar to the downside and below the support will heighten the bear market. The next support is around 11,661.
The 200-day moving average has joined Bitcoin resistance for the first time. The price faces bear pressure at the support. An inside bar breaking out to the downside will weaken the cryptocurrency further.