YEREVAN (CoinChapter.com) — Bitcoin (BTC) price rallied last week after a weaker-than-expected U.S. consumer price index (CPI) softened inflation and growth concerns.
BTC price closed the week with a 4.92% gain, reaching above $24,100 as rate traders lowered their expectations for the Federal Open Market Committee’s September rate decision. Notably, market pricing through Fed futures and swaps projects a 50 basis-point rate hike as the most potential outcome.
FOMC minutes and U.S. retail sales data are due this week. Foreshadowing of the Fed rate hike plans could have Bitcoin face additional tailwinds, mainly due to its consistent positive correlation with risky assets like stocks.
But more rate hikes could result in a Bitcoin price correction. It is possible due to Fed Chairman Jerome Powell’s statement that “another unusually large increase could be appropriate” in their September meeting.
BTC price ‘rising wedge’ raises selloff risks
From a technical perspective, the BTC price hints at a sharp selloff this week.
The downside scenario for Bitcoin emerges from its recent price trends, wherein it has been rising inside a range defined by two ascending, converging trendlines. In other words, Bitcoin has been forming a “rising wedge” structure, which is considered a bearish reversal pattern.
In theory, a rising wedge breakdown leads the price to the level that is as far from the breakpoint point as the maximum distance between the wedge’s lower and upper trendline.
As a result, Bitcoin’s breakdown target comes to be around $18,400, down nearly 25% from today’s price.
