- Bitcoin has continud to consolidate in the past few days.
- It has formed a bearish pennant pattern on the daily chart.
- The outlook is still bearish as monetary conditions tightens.
The BTC price has been in a consolidation mode as investors wait for the upcoming minutes by the Fedearl Open Market Committee (FOMC). The coin is trading at $29,742, where it has been in the past few days as its put/call ratio points downwards. So, will Bitcoin go back up?
FOMC minutes ahead
The Bitcoin price has moved into a consolidation phase in the past few weeks as demand for the coin retreats.
Investors are simply worrying about the current state of the market and the fact that most assets have been in a downward trend.
Global stocks have declined sharply, with many people worrying about the bursting of the tech bubble. For example, most stocks in the Ark Innovation Fund (ARKK) have crashed by more than 50% from their highest level in 2020.
Meanwhile, the Bitcoin fear and greed index has been in a downward trend as these worries persist. The index is now sitting at the extreme fear zone of 11, which is the lowest it has been in months.
The next key driver for the Bitcoin price will be the upcoming minutes by the Federal Reserve. The minutes will provide more color about what the bank is planning to do in the coming months.
Read more on how to buy Bitcoin with American Express card.
While these minutes are important, they will likely not have a major impact on Bitcoin and other risky assets since the future actions by the Fed have already been priced in.
Statements by the Fed Chair and other officials have showed that they will continue hiking interest rates in the coming months. It will also start implementing quantitive tightening policy in the coming months.
Meanwhile, data compiled by The Block shows that the Bitcoin put/call ratio has started declining. It now sits at 0.66, which is lower than this week’s high of 0.70. A lower ratio is usually more hawkish.
BTC price prediction
Turning to the daily chart shows that the BTC pair has been in a tight range in the past few days. A closer look shows that the coin has formed a bearish pennant pattern that is shown in red. In most cases, this pattern usually leads to a bearish breakout. It has also moved below the 25-day and 50-day moving average and the important support at $33,134.
Therefore, there is a likelihood that the coin will soon have a bearish breakout. If this happens, the next key support will be at $25,0.
Contributors
