Bitcoin price has gone nowhere over the past few weeks, with its recent attempts to recover finding substantial resistance at $98,000. BTC was trading at $89,545 on Saturday, and a forming pattern points to a deep dive ahead of the Federal Reserve interest rate decision.
Bitcoin Price Technical Analysis Points to a Dive
The weekly timeframe chart shows that Bitcoin has formed numerous bearish patterns that may lead to a deeper dive in the coming weeks.
It formed a multi-month rising wedge pattern, a pattern made up of two converging trendlines. A bearish breakout normally happens when the two lines are about to converge. This has already happened, and the coin remains below the wedge.
The coin is now forming a bearish pennant pattern, which consists of a vertical line and a triangle. The two lines of this triangle are nearing their confluence, which may trigger a bearish breakout soon.
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Meanwhile, popular oscillators like the Relative Strength Index (RSI) and the Percentage Price Oscillator (PPO) have formed a bearish divergence. This divergence occurs when an asset is in an uptrend and a series of lower lows forms.
Bitcoin price has also moved below the 50-week Exponential Moving Average (EMA). Therefore, the most likely scenario is where it retreats sharply in the coming weeks. Such a move will see it drop to the November low of $80,000 and below.
The bullish BTC price forecast will become invalid if the coin rises above the key resistance at $100,000. Such a move will mean that there are still bulls left in the market.
Federal Reserve Decision Ahead
One reason why the Bitcoin price has wavered is that its role as a safe-haven asset has been debunked in the past few years. In most cases, data shows that BTC has underperformed the broader market in periods of elevated risk.
For example, Bitcoin lagged the market this week amid rising tensions in Greenland. Instead, the gold price has been in a strong rally, with inflows in its ETFs like GLD and IAU rising to a record high. Bitcoin ETFs have shed billions in assets in the past few months.
That is a sign that market participants believe that gold is a better safe-haven asset than Bitcoin. As such, gold will likely continue to outperform Bitcoin due to rising risks, including soaring US public debt and a potential US strike on Iran. Also, there are concerns about Federal Reserve independence.
The next key catalyst for BTC’s price will be the Federal Reserve’s interest rate decision on Wednesday next week. Economists expect the bank to leave interest rates unchanged. Still, a statement by officials may affect Bitcoin and other assets.
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