Key Bitcoin outlook:
- Bitcoin stays put near $31,000 in a week ruled by macro factors.
- The US dollar benefits strongly safe-have flows.
- More lower grounds prepared for Bitcoin on technical indicators’ prospects.
YEREVAN (CoinChapter.com) — Bitcoin prices were mum near $31,000 in the new week as investors continued to drift away from the flagship cryptocurrency amid a mixed global economic outlook.
The BTC/USD exchange fell more than 1.25% to an intraday low of $31,317 on Monday. Its downside move came alongside a similar plunge across global stocks, with the US futures signaling a depressive day after the New York opening bell.
Meanwhile, US government bonds and gold rallied amid fresh Covid-19 outbreaks. So it shows, investors sought traditional assets as their safe haven—not Bitcoin—to safeguard their portfolios from a dwindling stock market.
Bitcoin’s bias-conflict near $31,000-support also appeared against a solid-looking US dollar.
The greenback gained a bullish footing after the Federal Reserve increased its taper talks after its June meeting. That is: slashing down its $120bn a month bond-buying program that cushioned the US economy since the Covid-19 pandemic-led market crash in March 2020. However, while traders increased their bets on accelerated monetary policy tightening, Fed chairman Jay Powell pushed back on the notion in his recent congressional testimony.
Bitcoin was trading above $40,000 before June’s Federal Open Market Committee’s meeting.
However, it fell to as low as $28,800 after the event, signifying that crypto investors do not like Fed’s taper tantrum. On the other hand, the dollar rallied amid growing demand for US bonds among foreign investors, strong retail sales in June, and safe-haven inflows led by the Covid-19 comeback, driven by the highly transmissible Delta variant.
All things considered, the US dollar looks poised to continue its bull run in the session ahead. Unfortunately, that could sap investors’ appetite for Bitcoin, which has already fallen by more than 50% from its record high above $65,000.
BTC/USD setup this week: a bearish triangle
Technically, BTC/USD looks trapped inside a symmetrical triangle pattern—and since the structure has formed during a downtrend, its path of least resistance is to the downside.
Meanwhile, Bitcoin has broken below its long-standing support, the 50-week simple moving average (50-week SMA; the pink wave in the chart above). That has further increased the downside pressure on cryptocurrency.
Long-term, things look bright. Powell last week has called for regulators to create more crypto regulations. While that may sound bad for people who want to use Bitcoin for nefarious purposes, the news is good for the class that wants to invest genuinely in cryptocurrency. Furthermore, Twitter and Square CEO Jack Dorsey has announced that they are building new cryptocurrency units using Bitcoin.