Following nearly two weeks of unsuccessful attempts to position itself above the $17,200 resistance level, Bitcoin's current rise has revived some recovery expectations. The $17,000 resistance is acting as lagging support for the price of bitcoin. BTC may keep declining toward the $16,000 support area. After failing to overcome the $17,000 and $17,200 resistance levels, Bitcoin started a new drop. The price is trading under the 100 hourly simple moving average as well as $16,700. On the hourly chart of the BTC/USD pair, a strong bearish trend pattern is developing with resistance located close to $16,600. If there is a definite move below the $16,500 support region, the pair may fall even more.
The buyers and sellers have stayed on the sidelines as a result of expectations for inflation rates in the next US CPI data and its potential impact on the Fed's interest rate action. The trade volumes have consequently been modest. The recent rise in stablecoin dominance has confirmed the current mood of cautious investors. Investors may move away from "risky" investments in response to a potential increase in interest rates by the Federal Reserve. In these unsettling times, it is crucial for investors to properly manage the risk in their portfolios through diversification.
I don't tend to be gloomy or pessimistic. But after more than ten years of technical analysis, you can tell quite well from a quick glance at the charts whether a trend is favorable or bad. Bitcoin may eventually reestablish a positive upward trend. The charts don't look promising right now. However, we can plan from here. The latest low near $15,500 is still vulnerable as long as bitcoin is trading below all of its daily moving averages. That level has held twice already, but the question is whether it can continue to provide support if it is put to the test.
Traders have a line in the sand to trade against if it is possible. If not, it unlocks the door to the previous breakout zone from 2019 and 2020, which is the $13,750 region. Let's look at the upside and see whether bitcoin can close above its 10-day, 21-day, and 50-day moving averages on a daily basis, say $17,000. The $18,000 to $18,500 range would theoretically be accessible again if it were to accomplish it. Bullish traders must continue to be defensive and tactical while trading bitcoin because the trends are still bearish.
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