RLinda ! BTCUSD-> The calm before the storm!BTCUSD is currently fluctuating in a narrow trading range of $20300 - $20800 in anticipation of the FOMC decision and the US Fed rate, indicating investors are hesitant ahead of important news. On the whole, there is a risk-off in the market ahead of the Press Release, which is expected during the New York session
(Chart 1 indicates narrow range consolidation and MA50 and MA200 indicators at 1H)
Important:
-High inflation.
-Federal Reserve meeting (rate hike expected)
-Cheap bitcoin and hashrate growth negatively affect mining companies
-Hacking
-Bottom of bitcoin (is it found?)
-Technical analysis.
Inflation is at an all-time high, hence the market expects the Fed Reserve to raise interest rates by 75 basis points. In such an outcome, all eyes will be on the December meeting and it will be especially important if the dynamics of core inflation lead to a fifth rate hike.
At the same time, investors are hoping for good luck and are looking for signs to lower the pace of rate hikes in both the upcoming press release and the December meeting.
(Chart 2 Illustration of a strong decline, cheap price and lack of the usual volatility)
Cheap bitcoin and a sharp rise in the hash rate (the second reaches highs) of the network creates problems for mining companies.
Bitcoin hashrate is the amount of processing power transferred to the blockchain during the mining process
Companies that rely on bitcoin mining as their only business and source of income are currently struggling:
-each block is becoming increasingly competitive
-energy prices are rising dramatically
-and hash prices are falling.
-profitability is falling.
The drop in the price of bitcoin, which has fallen 75% from its all-time high of $69,000, is certainly not making things any easier for miners
(Chart 3 Comparison of the 2018-2019 bottom and finding the bottom of the present day)
Shortly before midnight GMT on Tuesday, the Deribit crypto exchange was hacked. $28 million in $BTC, $ETH and $USDC was stolen, while customer funds were safe and losses were covered by the company's reserves. The market did not react much to this fact and continues to consolidate before more important news.
Most investors and analysts are inclined to believe that the market continues to look for a bottom:
- Significant volumes of BTC have already "changed hands," the scale, however, is still less than the bottom of 2018-2019
- in this cycle of 2022, still not many days to say that the bottom is formed and may need an additional phase of "redistribution" to test the determination of investors in the market
- There is still no sign of a significant influx of new demand in the market
- Still no hint of redistribution of the initiative into the strong hands of the big players
(Chart 4 Illustration of an equilateral triangle. "The calm before the storm")
From a technical analysis perspective, we see declining volatility and strong range boundaries that squeeze the price ahead of the upcoming Press Release
On the lower timeframe, we are seeing an equilateral triangle formation after the recent surge in energy and momentum to a record high of +$21,000 in the past few weeks.
This pattern signals a neutrality between investors at the moment. Price has moved into the "calm before the storm" phase.
A breakdown of one of the boundaries of this pattern may provoke a strong movement in one direction or the other:
-On the bullish side, a sharp increase in demand for bitcoin may allow it to overcome the $20,576 resistance zone and reach the $21,000 level. A further bullish break above the $21,000 level could lift BTC to $21,900
-The target of the short move will be the support of $19500
(Chart 5 Technical Indicators at 4H)
On the 4H timeframe, Flagship BTCUSD is trading in an uptrend channel with support around $20,300 and resistance around $20,700.
- Tested by a touch and subsequent consolidation of the trending MA-50
- To the 200-MA the price needs to go about 4% of its move, which could indicate a strong support zone and the price is in a local bullish move.
-RSI is behind the sellers, which indicates a slight reversal of the local trend
-MACD is also bearish
-Press release on rate may motivate the price down
-Breaking strong support will force the price down to the 18500 zone
(Chart 6 - Price in neutral, but at the same time in the risk zone)
The important nuance is the consolidation - 20433 - 18510.
The price on the 26th tries to break through the resistance, but it is obvious that the market lacks the liquidity and energy to overcome this zone.
Based on the above, it follows that:
-An equilateral triangle is forming in the consolidation resistance zone, a breakdown of the support may provoke a return of the price to the consolidation boundaries
- Very little positive news to overcome the strong resistance zone
- The market has not yet tested its global lows of the global drop.
- There is a Federal Reserve rate hike coming up, which is likely to negatively affect price performance.
Have you ever wondered what will happen to bitcoin? Is it safe to say that everything is obvious?
Sincerely R. Linda!
