Bitcoin price has held steady in the past few days as investors wait for the next catalyst. While BTC has strong fundamentals, its technicals suggest a significant decline in the coming days or weeks.
Bitcoin Price Technical Analysis Points to a Dive
The weekly chart shows that the BTC price has been in a strong uptrend in the past few months. This surge has pushed it above the 50-week and 100-week Exponential Moving Averages (EMA), which have provided it with robust support recently.
However, this chart also points to a drop as the coin has formed a highly bearish rising wedge chart pattern. The upper side of this pattern connects the highest swings in December last year, January, and July this year.
On the other hand, the lower side has linked the lowest swings since July last year. The two trendlines are now nearing the confluence, which is where a bearish breakout happens. If this pattern holds, the Bitcoin price could potentially crash to as low as $88,000, which is 26% below the current level.
The bearish Bitcoin price forecast is also illustrated by the fact that it has formed a bearish divergence pattern. This pattern is evident in the fact that the Relative Strength Index (RSI) has formed a descending channel, despite the price continuing to rise.
Bitcoin price chart | Source: TradingView
BTC Price Formed a Double-Top
The daily chart also shows that the Bitcoin price is at risk of a bearish breakdown. That’s because it formed a double-top pattern at $123,000 and a neckline at $112,000. This is another highly bearish chart pattern that often signals further downside.
The profit target in this case is established by measuring the distance between the double-top and the neckline, which is about 9%. Measuring the height from the neckline gives a target price of $101,000.
BTC price chart | Source: TradingView
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BTC to React to Federal Reserve News
The potential catalyst for the Bitcoin price crash will be the actions from the Federal Reserve. The bank will publish minutes of the last meeting tomorrow, August 20. These minutes will provide information about the recent meeting and outline the deliberations of the officials.
The next key Fed news will be released on Friday, when Jay Powell delivers a closely watched speech at the Jackson Hole Symposium in Wyoming. This is an annual gathering of global central bank officials.
Historically, this meeting gives the Fed Chair an opportunity to share the outlook for the remainder of the year. The Bitcoin price will likely crash if Powell delivers a highly hawkish statement.
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