BTC Still Stuck in The Mud

It’s been a frustrating couple of months for Bitcoin bulls. Following the breakout to fresh highs in early March, price has since corrected lower and settled into a congested block of consolidation broadly framed between 60695 and 74325. A failed downside break of the range at the start of the month offers bulls some hope that a resumption of the bull trend is coming though plenty of two-way risk remains. The recent miss in US jobs data fuelled a fresh wave of demand in BTC though this trailed off last week. Still, while price remains within the corrective bear channel (potential bull flag), bulls are looking for the range to eventually resolve higher.

US Inflation

Looking ahead this week, focus will of course be on Wednesday’s US inflation readings. While Bitcoin typically is supposed to be unaffected by traditional macro factors as a decentralised currency. However, increasing institutional participation in the crypto market has altered Bitcoin’s trading dynamics somewhat so that it now displays characteristics more in line with traditional risk assets such as rising when USD weakens, responding to shifts in the Fed outlook.

Near-Term Outlook

With this in mind, Wednesday’s data holds the potential to create fresh demand for BTC if we see US CPI undershooting forecasts, leading to a sell off in USD. If Fed easing expectations begin to rise again, bolstering the likelihood of a cut in September, this should be bullish for BTC near-term.

Technical Views

BTC

The correction lower in BTC has seen price trading along the bottom half of the bear channel, with price settling into a smaller contracting triangle pattern. With 60695 holding as support and momentum studies turning higher, focus is on a continued push higher here with 69355 and the bear channel highs the next resistance to watch above current levels. 

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