The price of Bitcoin in danger of a new re-test of $ 30K, after breaking the bearish triangle

Overnight crash in the bitcoin market on Wednesday lowered prices from $ 35,077 to $ 32,250.

The price of bitcoin (BTC) seems poised to test $ 30,000 as traders continued to drop expectations for an upward movement based on a bearish technical pattern.

The symmetrical triangle, as the structure is formed when the asset fluctuates between two converging trends.

In this way, the asset bounces after testing the bottom line of the triangle as a support and withdraws after testing the top line of the trend as a resistance. Eventually, it goes out of range, in the direction of its previous trend, and falls with the maximum distance between the top and bottom lines of the triangle.

Why $ 30,000?

Bitcoin was in a similar triangle-like consolidation pattern until it eventually broke below the bottom line of the structure. As a result, the probability of the cryptocurrency shifting its target to fall close to $ 30,000 increased. This is partly because the maximum height of the structure is timid at $ 2550 and subtracting it from the breakout point (~ 33,878 dollars) puts the price target close to $ 31,308.

The bearish trend also emerged when Bitcoin tested $ 32,334 as its intermediate support in the early session in London on Thursday. There was a slight rebound, which took the price over $ 32,600. However, there was a lack of further persuasiveness due to a discrepancy between prices and volumes, suggesting that bitcoin could resume its downward trend.

The price traded in the middle of the rectangle as it receded from its upper resistance on the trend line. Such a move usually causes the BTC / USD spot rate to fall to the lowest level of rectangle support, which coincided with $ 30,000.

Fundaments

The unsupported macroeconomic fundamentals partly fuel the recent decline in Bitcoin prices.

The main ones were the minutes of the meeting of the Federal Reserve, which came out on Wednesday around 14:30 EST. As expected, US central bank officials have suggested that they may eventually withdraw their support for the economy sooner than expected.

Various participants mentioned that they expect the conditions for reducing the pace of asset purchases to be met a little earlier than they had anticipated in previous meetings, following the input.

Bitcoin tends to take advantage of free monetary policy.

The cryptocurrency jumped from $ 3,858 in March 2020 to $ 65,000 in mid-April 2021 as the Fed lowered its reference interest rates to almost zero, thus affecting the purchasing power of the US dollar and began buying government bonds and mortgaged securities worth $ 120 billion a month.

For clarity, central bank asset purchase programs are causing inflationary pressures as they expect to monetize part of government deficit spending. Such purchases usually inflate stock prices and fixed income investments. Along with cheaper lending, loose money programs increase final liquidity in the system, stimulating Bitcoin’s account of “superior store of value” versus unlimited supply of dollars.

As a result, investors have begun to move to riskier assets, including bitcoin, to seek better returns. But as fears of the Fed’s statement rose above the markets, Bitcoin began to decline.