Bitcoin (BTC) for the second week in a row is teetering on the edge of a massive breakout/rejection, at the same time that FED chair Jay Powell has issued stern warnings about the scope of economic recovery in the US.
In short, Powell has expressed his belief that there are a “couple more months” of job losses in the pipe, and that the US economy will not fully recover (a dubious notion on its own) until a vaccine is developed.
Otherwise stated, Powell eventually expects 20-25% unemployment levels in the US, the highest since the Great Depression.
How has the news translated to the 24/7 Bitcoin markets?
Seemingly not well, with clear signs of ebbing strength on the 4-hour chart. The latest top in a triple top formation has started to form a clear bear divergence, signalling likely downside.
Bitcoin is having trouble staying above the EMAs here, as well, signalling a flagging trend.
The daily chart is also rather negative, with two broad attempts to break above the trendline (dotted) failed. There is a pressure buildup around this area, with Bitcoin getting stuck at the trendline, and above the previous parallel channel.
The RSI here is currently trying to peek back above the local trendline, but is not quite getting the job done. The MACD has failed once to re-cross positive. The signs are thus mostly negative, but the almost-breaking RSI trendline makes this a mixed picture.
Finally, on the weekly, we zoom way out just to get a sense of how important these small movements are. Bitcoin is grating against a downtrending trendline (red zone) that has held for two and a half years.
If we were to see a breakout here – perhaps spurred by Bitcoiners’ concerns of inflation following massive government spending, although this a quite a complex, often oversimplified topic – it would be an epic move to be sure.
The alternative is a breakdown and selloff back down to the bottom of this huge consolidation, around $5,000. Either way, it is an exciting moment for Bitcoin chart watchers.
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