Key Points
- Bitcoin’s price has been under pressure due to trade concerns, but two chart patterns suggest a potential rebound.
- The crypto fear and greed index has slipped to 35, indicating market fear, largely due to ongoing trade wars.
Bitcoin’s value has been under strain this week due to lingering trade uncertainties. However, two uncommon chart patterns indicate a possible recovery.
The value of Bitcoin (BTC) was unstable, and the crypto fear and greed index fell into the fear zone of 35 this week. This decline was mostly due to the fear of a trade war between the United States and its primary trading partners.
Trade War Concerns
The United States has begun imposing tariffs on Chinese goods, which may impact trade worth more than $450 billion. Although tariffs on Canadian and Mexican goods have been halted, they may be reinstated next month.
These trade uncertainties have caused market participants to become fearful. The crypto fear and greed index has decreased to a level of 35, and the CNN Money index has dropped to 39.
Bitcoin has also been unstable as investors remain cautious. Strategy has halted its Bitcoin purchases, and CoinGlass data shows weak futures open interest. The inflow of Bitcoin ETFs has remained around $57 billion, a decrease from this year’s high of $68 billion.
Federal Reserve Impact
The price of Bitcoin has also been affected by the Federal Reserve, which hinted at a more hawkish tone in its first monetary policy meeting of the year. The bank kept interest rates unchanged and suggested that it would only make two cuts this year. Bitcoin and other altcoins typically perform well when the Fed adopts a dovish stance.
Technical Indicators
The weekly chart reveals that Bitcoin has formed two rare chart patterns that often result in substantial gains over time. The first is a cup and handle pattern that formed between November 2021 and November of the following year. This pattern consists of a horizontal line and a rounded bottom to form the cup, followed by some consolidation.
The profit target is determined by measuring the depth of the cup and then measuring the same distance from the top of the cup. In this case, the depth is about 80%, suggesting that the coin will rebound to $123,000.
Bitcoin’s recent consolidation is part of the bullish flag pattern, which consists of a long vertical line and a rectangle pattern. The flag pole’s size is about 55%. Measuring that distance from the top suggests a breakout of $166,000.
The caveat to this Bitcoin price prediction is that it may take some time, as it relies on the weekly chart. For instance, it took about three years for the C&H pattern to form. Therefore, a surge in Bitcoin’s price to $166,000 may take some time to materialize.
