This week, Bitcoin’s price experienced a modest increase following a mixed interest rate announcement from the Federal Reserve on Wednesday.
Bitcoin (BTC) surged to a peak of $87,375, marking its highest point since March 7, and representing a 13% increase from its lowest point this month.
This rebound mirrored the recovery of other assets, including stocks and commodities. U.S. equities gained ground following the FOMC announcement, with the Dow Jones and S&P 500 both rising over 1%. Gold reached an all-time high of $3,100, while copper exceeded the $10,000 threshold.
The rally was likely fueled by Jerome Powell’s remarks regarding Donald Trump’s tariffs potentially causing transitory inflation, leading to expectations of more Fed rate cuts than previously anticipated. This scenario likely contributed to the decline in rate-sensitive 10-year bond yields after the Fed’s decision.
However, the gains in these assets were partially reversed, with Dow Jones futures dropping by 200 points and Nasdaq 100 futures falling by 145 points.
Technical Indicators Suggest Potential Further Drop for Bitcoin
Technical patterns indicate that Bitcoin’s price may continue to decline in the near future. The daily chart suggests that the cryptocurrency is gradually forming a rising wedge pattern, which is often viewed as a bearish indicator. This configuration consists of two upward-sloping and converging trendlines, and a bearish breakout is expected when these lines meet.
Additionally, Bitcoin has exhibited other bearish patterns. It recently formed a death cross pattern, where the 50-day and 200-day Weighted Moving Averages intersected. A wedge pattern is generally considered a significant bearish formation in technical analysis.
Prior to these developments, BTC’s price formed a double-top pattern at $108,233, with the neckline set at $89,000, which Bitcoin is currently attempting to test again. A break-and-retest often serves as a bearish continuation signal.
Consequently, the projection for the coin is bearish, with a primary target set at $76,750, the lowest point this month. A decline below this level could indicate further downside, potentially reaching $74,070, which is the peak from March of last year. This target represents approximately 14% below the current price. A drop to last March’s high would signal a bullish turnaround, reflecting a successful break-and-retest.