YEREVAN (CoinChapter.com) – Bitcoin (BTC) climbed up 33% since bottoming near $17,600 on June 19. As a result, BTC/USD changed hands at $23,900 on Aug. 16. However, several indicators point to another looming selloff.
#1 Similar BTC patterns in the past
The past is not always indicative of the future. However, some patterns might help determine the upcoming bias when it comes to price action. For example, Bitcoin experienced a selloff wave in 2018 and lost over 80% of its value throughout the year after the Dec. 2017 peak.
Meanwhile, the chart below clearly indicates several areas of short-term bullish attempts within the 2018 bear market. Moreover, they painted similar Flag patterns on the Bitcoin chart in 2022.
Admittedly, the swing of the moves was considerably lower. However, the pattern could play out the same bearish scenario in the current market decline.
#2 Fed’s hawkish policy likely to continue and trigger Bitcoin selloff
As CoinChapter covered earlier, Bitcoin might face another leg down due to its correlation with risk-on assets. The stock market, in turn, heavily depends on the Federal Reserve’s policies against record inflation.
The recent U.S. consumer price index (CPI) reports softened inflation and growth concerns. However, market strategists assess that the Fed is unlikely to pivot from its hawkish interest rate hikes despite positive inflation-easing signs this week.
Ben Emons, managing director of global macro strategy at Medley Global Advisors, confirmed the outlook on CNBC’s Squawk Box Asia.
If you strip off any of the headline noise, some of the… CPI, even PPI [numbers] still show upward pressures. The Fed cannot be done here. It probably means that the 75-basis-point rate hike remains on the table.
commented the expert.
#3 Ethereum’s improving foothold ahead of the Merge
As CoinChapter previously reported, the second-largest cryptocurrency Ethereum (ETH), gained bullish momentum ahead of its promised September Merge and pushed beyond the $1,700 resistance. In the process, it one-upped Bitcoin, gaining a key advantage over the flagship crypto.
As a result, the ETH/BTC pair soared 60% since June 13 and could continue to rise throughout the month. Meanwhile, the number of crypto enthusiasts betting on the elusive ETH 2.0 kept growing. As the long-awaited Sep. 19 Merge approaches, the total value in the ETH 2.0 Deposit Contract reached an all-time high of 13,3 million ETH, according to an on-chain analysis by Glassnode.
Also read: Bitcoin week ahead Ep23: FOMC minutes to dictate BTC price trends.
If the Ethereum surge continues, Bitcoin will face heightened competition and more headwinds. Additionally, paired with unfavorable broader market conditions, the previous patterns might play out, ensuring another selloff.
