- Bitcoin is currently caught between a couple of massive driving forces, as we are trying to sort out where risk appetite is going globally. This continues to be a noisy place to trade, but it is now offering a well-defined range.
BTCUSD
While the dollar index has hit a 4-month low, which is traditionally a risk-on tailwind for cryptocurrencies, the 10-year yield in the United States remains stubbornly above 4.2% signaling that the market expects the higher-for-longer scenario for rates, which is typically bad for Bitcoin and other crypto.
Immediate price action is dictated by caution when it comes to macroeconomics ahead of the Federal Reserve interest rate decision, but quite frankly I think by the end of the day it’s very unlikely that we will have broken out of the consolidation range we have been in.
Consolidation and Technical Levels
Market participants have deleveraged significantly following the October volatility which sent Bitcoin and other digital assets much lower. Most of the time we have seen shifting capital go into defensive option structures rather than perpetual futures or the spot market.
Until a clear signal emerges from the Federal Reserve, Bitcoin is effectively bouncing into supply struggling to sustain a significant breakout above the short-term psychologically significant $90,000 level. If we were to break above the $90,000 level significantly, perhaps breaking above the 50-day EMA as well, then it could open up a move to the $95,000 level.
If the market were to turn around and fall rather significantly, slicing through the $84,000 level, then I think Bitcoin finds itself in serious trouble. Right now I don’t expect that, but rather I expect a lot of range-bound trading between $84,000 on the bottom and $95,000 on the top until something changes. Short-term range-bound systems probably fare best. With that being said, I like the idea of buying dips here, and getting rid of profitable trades after they make a short-term run.
Top Regulated Brokers
Ready to trade our technical analysis of Bitcoin? Here’s our list of the best MT4 crypto brokers worth checking out.