On September 6, the price of bitcoin (BTC) fell below $20,000 and the asset looks set to take another fall in September, due to the strong US dollar and based on technical analysis patterns. .
Bitcoin targets $15,000
Technically, bitcoin is likely to fall to $15,000 or lower in the coming weeks, after breaking out of its “bear flag” pattern. »
For the uninitiated, bearish flags form when price consolidates higher within a parallel, ascending range after a strong downtrend. They usually resolve after the price breaks the lower trend and falls to a length equal to the previous downtrend.
Bitcoin has entered the so-called breakout phase of its bearish flag pattern, with a target below $15,000, as seen in the chart above.
money is king
The prospect of a weaker bitcoin in 2022 is increasing, mainly due to the worsening economic backdrop.
The 60% fall in the price of bitcoin since the beginning of the year is one of the unfortunate consequences of the Federal Reserve’s hawkish policy aimed at bringing inflation down to 2%, from the current 8.5%. In detail, the US central bank raised its benchmark rates to a range of 2.25% to 2.5% by making four consecutive increases in 2022.
These increases fueled the desire for cash-based securities over riskier assets such as bitcoin.
For example, US banks with savings accounts are offering their customers an annual return of 2% or more, up from about 0.5% at the start of this year, according to data from BankRate.com.
Meanwhile, Goldman Sachs analysis shows that mutual funds managing $2.7 trillion in stocks increased their liquidity by $208 billion in the first half of 2022, the fastest rate of allocation yet.
The general demand for cash helped the US dollar index, which measures the strength of the greenback against a series of major foreign currencies, to 110.55 on September 6, the highest level since 2002.
As a result, stocks, bitcoin, ether, copper, timber, and other assets have outperformed cash in 2022.
Also Read: Bitcoin Range Breakout Could Trigger Buys in ADA, ATOM, FIL and EOS This Week.
This trend could continue, since the Federal Reserve plans to continue raising rates, according to a statement by Jerome Powell at the recent Jackson Hole symposium.
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