Bitcoin continues to trade under pressure as bears make numerous attempts to break the floor of $220-225 on the eve of the expected U.S. Fed interest rate hike.
Just as lowering the interest rates is considered equivalent to pumping money into the system, raising the interest rates is considered sucking out the money from the system. Therefore, if the U.S. Federal Reserve decides to call its first interest rate hike since 2009, it will lead to tightening of the US dollar flow in the system. The US dollar being one of the most preferred safe-havens is therefore expected to see a huge rush from market participants. This may put pressure on the BTC-USD pair.
Bitcoin is currently trading at $228.89, down 0.7 percent or $1.6.
Take a look at what the daily BTC-USD price chart is saying about the future course of action.
Bitcoin Chart Structure – As the selling pressure increased, Bitcoin fell to a low of $223 – the level around which Bitcoin previously formed a base before rising to $246 – before paring losses.
Fibonacci Retracements – The cryptocurrency has also retested the 23.6% Fibonacci retracement of $226.32 for the fourth consecutive day, even piercing it briefly intraday.
Moving Average Convergence Divergence – The MACD maintains its negative stance with a value of -3.4053 while the Signal Line is at -2.9434.
Money Flow Index – The MFI can be seen taking support from near the 50-mark; currently, it is at 56.0670.
Relative Strength Index – The RSI continues to ape the price action without offering any clue about the future course of action. The latest value is depressed at 41.0182.
I really don’t think that Bitcoin will remain attached to the current levels for long, and we should witness a breakout by the end of this week. Market participants can choose to wait for this breakout to enter with a clearer perspective.
Note: I am bearish on Bitcoin.