Bitcoin price has rebounded over the past few days, rising from this month’s low of $98,930 to a high of $106,000. This article explores the top reasons BTC will likely resume its downward trajectory soon.
BTC Rebounds as Government Shutdown Nears
There are at least three main reasons why the Bitcoin price has rebounded recently. First, the rebound is mostly due to the rising odds that the Federal Reserve will cut interest rates at its upcoming meeting. Odds of these cuts jumped to over 70% this week, a move that will boost risky assets.
Bitcoin price also bounced back as the government shutdown nears its end. A group of eight Democratic senators has joined Republicans in voting for the reopening.
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The end of the shutdown removes one of the top risks that the market has been facing recently. It also means that official statistics agencies will start publishing their numbers, especially on inflation and the labor market.
Bitcoin’s price also jumped as investors reacted to the falling Secured Overnight Financing Rate (SOFR), one of the most important numbers. SOFR normally determines the overall interest rates in the US. A falling number usually leads to more risk-taking among investors.
There are other reasons the Bitcoin price has rebounded, including the potential for a $2,000 stimulus check from the Trump administration, upcoming approvals for altcoin ETFs, and a recovery in open interest in the futures market.
Bitcoin Price Technical Analysis Points to More Downside
The daily timeframe chart shows that Bitcoin’s price crashed from its all-time high of $126,300 last month to a low of $98,935 last week.
It formed a double-top pattern at $124,425 and a neckline at $107,127, and it has come close to retesting this neckline, a move that will confirm the highly bearish break-and-retest pattern.
The Bitcoin price will also resume its downtrend due to the Supertrend indicator, which has remained in the red. In most cases, bullish breakouts normally happen when the indicator turns green.
Also, the coin has formed a death cross, which is typically confirmed when the 50-day and 200-day moving averages cross. In this case, the two weighted moving averages have already crossed.
Therefore, the most likely scenario is where it resumes the downtrend, initially to this month’s low of $98,935. A move below that level will signal more downside, potentially to the psychological level at $90,000.
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