Key Takeaways:
- Bitcoin charts spell trouble ahead for BTC.
- JPMorgan chief sees "more than recession" in the near future.
- BTC traders should keep an eye on the big picture before betting on the continuation of the recent uptick.
YEREVAN (CoinChapter.com) – Bitcoin (BTC) started the week at around $21,100 on Aug 22, after a slight 3% weekend uptick. While the flagship crypto held above $20,000, it confirmed the ‘bear flag’ setup, dropped below a significant support line on Aug 19, and could not recover.
Charts spell trouble for Bitcoin (BTC)
The bear flag occurs after a decline in the asset price and entails two parallel trendlines taking the value higher. As evidenced by the name, the bear flag setup forecasts a looming decline equal to the sharp drop preceding it.
Thus, BTC’s target price would be approximately $12,000 in the upcoming quarter.
The declining trading volumes support the outlook and evidence of insufficient bullish incentive to pump the flagship cryptocurrency any higher.
Moreover, Bitcoin and the rest of the crypto market might face further headwinds from the fiat economy.
As the recession claws deeper against the growing inflation, the Federal Reserve intends to go forward with the 0.75 percentage interest rate hikes in the coming quarter. An aggressive hawkish policy could potentially harm the equities and, by extension, the crypto market.
Also read: Bitcoin (BTC) Drops 7%, Why Recent Breakdown Could Gather Momentum.
Recession here to stay?
Meanwhile, according to Jamie Dimon, the chief executive of banking giant JPMorgan, “something worse than a recession” might be on its way.
On a client call in mid-August, the CEO specified that there is only a 10% chance of an economic slowdown that doesn’t lead to a recession while ominously warning there are 20% to 30% odds of a worse outcome.
The numbers are so distorted when you have this fiscal and monetary stimulus. Have you seen a recession where unemployment is going down? [Inflation] is around 8%. I don’t see it will dissipate that quickly. I think the Fed had 4% by the end of the year. I think that is highly unlikely.
commented the CEO.
Dimon issued an ominous “hurricane” warning back in June. His warning came on the back of the Federal Reserve starting its quantitative tightening policy to fight the growing inflation. In addition, supply chain disruptions due to the pandemic exacerbated the price increases and the worries that the Fed might tip the economy into recession as it combats inflation.
BTC prospects bleak as of Q3
The forecast did pan out, as two consecutive quarters of negative gross domestic product (GDP) growth signaled recession time.
Moreover, the alarming escalation between China and Taiwan could dig a deeper hole in the global economy while Russia tightens the energy chokehold on Europe.
The unstable geopolitical situation could hinder Bitcoin’s recovery attempts unless the latter can decode from risk-on assets. In this case, BTC would assume the role of an inflation hedge and reclaim the ‘digital gold status.
