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.
The shock of the FTX bankruptcy is still fresh in the mind of crypto participants, and shorts may target any strength. This potential positioning is because of fears of contagion within the industry. Crypto lender BlockFi declared bankruptcy this week, and the crypto market is worried this may be the first of other failures.
Bitcoin usually responds well when the dollar declines, but recent price action indicates relative weakness as participants gauge stability within the industry. If the price breaks upwards from the ascending triangle, traders' nerves may settle somewhat, allowing them to take better advantage of the softer greenback.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.