Bitcoin price has gone nowhere in the past few weeks, with its recent attempts to recover finding substantial resistance at the $98,000 resistance level. 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, which is made up of two ascending and 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 in the process of forming a bearish pennant pattern, which is made up 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 happens when they are making a series of lower lows when an asset is in an uptrend.
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 as tensions on Greenland rose. 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 doing better than Bitcoin because of the rising risks, including the soaring US public debt and a potential US strike on Iran. Also, there are concerns about Federal Reserve independence.
The next key catalyst for the BTC price will be the upcoming Federal Reserve interest rate decision on Wednesday next week. Economists expect the bank to leave interest rates unchanged. Still, a statement by the officials may have an impact on Bitcoin and other assets.
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