Bitcoin Prices Lack Momentum to Break Higher?

After a tumultuous Q2, Bitcoin has entered Q3 with lackluster motion as prices continue to consolidate around the $20,000 mark.

 

Since the beginning of the year, heightened geopolitical risks and a shift in sentiment (caused by rate hikes, war and a gloomy economic outlook) has weighed on digital assets, driving Bitcoin back towards levels last seen in December 2020.

 

With a negative correlation existing between BTC/USD and interest rates, mounting price pressures and an influx of stimulus (throughout the Covid-19 pandemic) has forced the Federal Reserve to raise rates more aggressively than initially expected, reducing the appeal of speculative assets.

 

With the FOMC Minutes and NFP data on this week's economic docket, fundamentals may assist in driving prices out of the $18,000 - $22,000 range.

 

On the weekly chart below, BTC/USD has often experienced large price swings, gaining traction once a clear direction has formed. By using Fibonacci levels from historical moves, both technical and psychological levels have provided support and resistance over time, often assisting in fueling momentum once these levels are broken.

 bw.png

 

On the Daily chart, the $19,225 Fib has provided an additional layer of support with a break below $19,000 opening the door for a retest of the June low at $17,592.

BD.png

 


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