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The bitcoin H4 chart shows a value-type pattern. It charted a sideways distribution from the last week of October into the first week of November (blue-shaded area). After which bitcoin dropped from the 20K range to the 16K range, a decline of around 20%.
Over the last two weeks, Bitcoin has been in a consolidation pattern - a small ascending triangle. This pattern generally suggests continuation, i.e., a base case of a breakdown as the cryptocurrency comes under further pressure.
BTC/USD finds support today, despite the collapse of another crypto lender and hawkish remarks by Fed officials
Crypto fears persist after FTX filed for bankruptcy, but BTC/USD covers initial losses, help by supportive comments from Elon Musk
Cryptocurrencies take a hit this week as crypto exchange FTX faced liquidity issues and rival Binance agreed to acquire its non-US operations
BTC/USD dropped after the Fed’s latest jumbo rate hike on Wednesday, but shows resiliency to the hawkish commentary, trying to avoid a losing week
The market will listen to the statement's tone and Fed Chair Powell's press conference. How it is perceived will be market-moving. The real rate looks to be setting up for a trough (green arrow). If so, bitcoin may be charting a peak. I.e. if the tone is hawkish and the real rate moves up, bitcoin is likely to come under pressure.
BTC/USD is having a good week as sentiment shows improvement and the US Dollar slides, but key data from the US loom
As long as inflation remains a worry and the prospect for higher rates persists, demand for risky assets, including cryptocurrencies, will be facing headwinds.
Bollinger Bands suggest a volatility cycle that oscillates between band squeezes and expansions. For example, the previous four times, the Bollinger Width dropped below 0.1 (green dashed verticals), significant volatility increases followed, with the cryptocurrency declining meaningfully.
Interestingly, the recent drop in the greenback (blue vertical) has benefitted the NAS100 more than the cryptocurrency. Given BTCUSD's recent resiliency, we would have expected it to have had a more robust response to the dollar's movement. Instead, the NAS100 has risen by 5.6% compared with Bitcoin's 4.6%, showing its relative strength.
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