Bitcoin Encounters More Serious Trouble
- Bitcoin forming a massive descending triangle
- Cryptocurrency has run out of steam
- It needs to make a decision
- Federal Reserve meeting on Wednesday
Bitcoin has struggled all summer to pick up any type of momentum. While digesting the gains over the last couple of months after the surge higher should make a lot of sense, the reality is that the highs are starting to fall and possibly forming an ascending triangle. Such could be a very negative turn of events, as it was this formation that sent Bitcoin down to the lows.
With that in mind, it’s hard to imagine that traders have forgotten what happened a couple of years ago. The formation is certainly something to pay attention to, and people will continue to be concerned with Bitcoin as it has done very little since June.
Levels to watch
There are several levels to watch currently, with a key one being $9250. Any move below there will more than likely send this market much lower.
The downtrend line is what the buyers will be watching to start going long. If the market does break above that, it’s very likely that it will go back towards the highs, with several areas between here and there that could cause some issues.
The initial level that would be difficult to break above is going to be the $12,000 level, followed by the $12,500 level. Obviously, the highs recently would also be an area that’s difficult to take out. But once it does happen, it’s very likely that market participants will be looking for a move to the $15,000 level, as it has big psychological importance.
To the downside, if the market breaks down below the $9250 level, it’s likely that $7500 would be targeted. Then, possibly based on the size of the triangle, it could go looking towards the $5000 level again. If it does, it’s possible that it wipes out a lot of traders, and perhaps put Bitcoin into a relatively negative market again.
Trading going forward
Late on Wednesday, the Federal Reserve will have an interest rate decision and, perhaps more importantly, a press conference. This will have a major influence on the US dollar, which by extension will significantly affect what happens with Bitcoin.
If the US dollar falls apart, it’s probable that the Bitcoin market could rally. However, if the Federal Reserve ends up being more hawkish than expected, it could strengthen the US dollar. This is more than likely to break the bottom of this triangle.