Bitcoin (BTCUSD) faced significant downward pressure in the previous week, shedding 2.84% and marking its fourth consecutive week of losses.
Currently trading 15% below its all-time high, Bitcoin continues to retreat from its peak amidst recent U.S. Dollar strength. The Greenback’s surge, propelled by robust economic data and heightened expectations of prolonged higher interest rates, has dissipated the cryptocurrency’s upside momentum. Additionally, escalating geopolitical tensions shifted market sentiment, favouring safe-haven assets over risk assets, including Bitcoin.
As the new week unfolds, attention is drawn to two pivotal events: the U.S. Fed Interest Rate Decision and the release of U.S. Nonfarm Payrolls data. These events hold significant sway over Bitcoin’s trajectory as traders assess the macroeconomic landscape’s impact on the cryptocurrency’s performance. With Bitcoin navigating turbulent waters, investors remain vigilant, eager to decipher the implications of economic indicators and central bank actions on its future movements.
Technical
Bitcoin has been firmly entrenched in a downtrend, with technical indicators highlighting the cryptocurrency’s downward trajectory. The descending channel pattern, coupled with price trading below the 100-day moving average, solidifies this bearish sentiment.
Despite an initial rally, which was sparked at the 59573.32 level amidst oversold RSI conditions, resistance at the 67272.73 level formed, coinciding with the upper boundary of the channel, halting further upside momentum. Subsequently, Bitcoin retraced to the pivotal 61.80% Fibonacci Retracement Golden Ratio level, indicating a significant pullback.
Further downside momentum could intensify selling pressures, especially with a high-volume breach below the Golden Ratio level. In such a scenario, the 59573.32 support level may come into focus. However, oversold RSI conditions at the Golden Ratio level could trigger a resurgence of upward momentum, possibly leading to a test of the 50% Fibonacci level. Amidst these technical dynamics, market sentiment remains cautious, with investors closely monitoring price movements and key support and resistance levels for clues regarding Bitcoin’s trajectory.
Summary
Bitcoin’s recent performance reflects a downturn from its peak, as downward pressure persists amidst U.S. Dollar strength and geopolitical tensions. Technical analysis underscores a bearish sentiment, with key resistance at 67272.73 and potential support at 59573.32. Traders remain cautious amid uncertainties surrounding economic indicators and central bank decisions.
Sources: Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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