Therefore, money management is essential. Even if I'm right, and this is a rising wedge, as I've drawn it, the price can still trigger a return move, which could be indiscernible to a rally within a rising channel. Nevertheless, even according to that version, the price may rise again but will likely meet overwhelming pressure at the top of the long-term falling channel. That means that some people are probably trading according to that interpretation, which may not be a wedge but a short-term rising channel. We draw the (dotted) line accordingly and realize it has supported Friday's plunge. Conservative technicians may include the price action of July 12 and 13 when Bitcoin fell. Finally, those sitting on the fence recognize a significant move and throw their weight into the fight.īoth the MACD-a price-based, lagging indicator-and the ROC-a momentum-based, leading indicator-provided bearish crosses.Ī note of caution. Moreover, some bulls may convert to bears, adding downward pressure. At this point, bulls are likely to cut their losses, encouraging sellers to push further. The last straw is when the price doesn't just languish but falls through the buyers' line. However, when time after time, buyers are proven wrong, as sellers are not willing to let prices rise proportionate to the buyers' line, bulls become disheartened. Given that the lower line represents buying and the upper selling, it is evident that buyers are more convinced than sellers that prices should rise. The catch is that the lower bound rises faster than its upper counterpart. This structure is a triangular pattern with both lines climbing. The leading digital currency fell through the bottom of a rising wedge. But Bitcoin may have also sparked a selloff for technical reasons. They took that to mean that the Fed would not automatically hike rates-as if that's what they've been doing until now-but would need to be convinced by data in order to do so.Īs a result crypto investors were stunned by the plunge in stock markets and the leading cryptocurrency on Friday. Investors had convinced themselves that if a Fed member was willing to utter that interests could go down when inflation fell, it meant that the central bank had pivoted.īulls also boasted that the Fed said it is now data-dependent. However, now bulls are losing their cool ahead of what is now expected to be a hawkish Fed symposium at Jackson Hole this week, after Fed members reiterated that interest rates are on an upward trajectory. Then, better-than-expected US corporate earnings supported risk, and the confirmation bias of diehard bulls that inflation and rising US interest rates were peaking helped. However, on June 21, after the ugliest week for US markets since the March 2020 crash, the S&P 500 jumped for no reason other than a dead cat bounce and that bargain hunting spread to Bitcoin.

The FOMC minutes show that the US central bank Fed went from the most accommodative policy on record to the fastest tightening since the early 1980s. We are in a bear market because the highest US inflation in more than 40 years has forced the Fed to reverse its position that inflation was transient and will ease right after lockdowns. However, the trigger is probably the most talked about market theme-the alleged US Federal Reserve pivot. Bitcoin may have started another leg down in its long-term downtrend, with the initial target of $17,611.Ĭrypto experts are surprised at the recent 'sudden' 10.4% drop and can find no catalyst for such drastic moves.

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