The price of bitcoin (BTC) continues to fall below the $22,000 level and the broader narrative among traders and mainstream media suggests that risk-loss perception is a dominant prospect ahead of this week’s Jackson Hole high.
During this three-day symposium, the Federal Reserve is expected to clarify its view on inflation, interest rate hikes and the overall health of the US economy.
Meanwhile, traders on Crypto Twitter continue to fantasize about a “Fed Recovery” where interest rate hikes will be limited to less than 0.25 basis points and some form of monetary easing will resume. , but the likelihood of the Fed taking a dovish view seems unrealistic in the short term, given the central bank’s 2% inflation target.
When it comes to the latest bitcoin price action, traders have an old saying:
“Eliminate the short-term trend in favor of the long-term trend. »
Overall, the BTC price trend is clearly down, with a series of recurring bearish flags that have continued for four months.
The power of the hammer. pic.twitter.com/ayxELfsBdz
— il Capo Of Crypto (@CryptoCapo_) August 23, 2022
Market power. pic.twitter.com/ayxELfsBdz — il Capo Of Crypto (@CryptoCapo_) August 23, 2022
Of course, the data on chain shows that the price could be lower than ever.
Of course, aggregate amounts and some on-chain data looking at BTC addresses can show whales and shrimp piling up.
Yes, open interest in BTC and Ether continues to rise and this adds weight to the bullish propaganda regarding the ETH Merge hard fork and ETH proof-of-work tokens, which puts exciting pressure on short positions in BTC and ETH.
All these things can happen, but beware of these opium-filled dreams and remember that the trend is a good friend that a trader can follow.
As unpleasant as it seems, the trend is down. Bitcoin continues to encounter resistance at its long-term downward trend and the price has failed to find resistance at key moving averages, such as the 20-, 50-, and 200-day moving averages.
Each price drop only creates a flagpole, and the subsequent “consolidation” creates the flag of the bearish continuation pattern. As can be seen in the pink boxes on the daily chart, the price of BTC is simply trading within a defined range before breaking below six in the underlying liquidity that shows the visible range and liquidity charts of the profile.
$BTC An optical aggregation example from yesterday
How to read liq maps: https://t.co/EaeFkgiggg
Join the conversation: https://t.co/Ac5ChFuNNl pic.twitter.com/nhVMv9suMH
— TheKingfisher (@kingfisher_btc) August 24, 2022
Example of BTC Optical Aggregate Optical from yesterday. How to read liq cards: https://t.co/EaeFkgiggg Join the conversation: https://t.co/Ac5ChFuNNl pic.twitter.com/nhVMv9suMH — TheKingfisher (@kingfisher_btc) August 24, 2022.
Basically, there is “nothing to see here” until the price has painted a few daily candles that indicate higher highs ie BTC must break above $25,000 and close the volume gap in the $25,000-$29,000 area.
From here, expect a consolidation in this new upper range or a continuation of a trend reversal where the 20-MA and 50-MA act as support. As we mentioned before, of course, there are tons of other data points that explain why the current price range is a buy zone, but what may be true for one trader is not necessarily true for everyone.
Some investors can afford to open long positions here and at lower levels and let them loose because they are rich and it is part of their plan. Others have smaller wallets and cannot afford to lose the opportunity cost of being stuck in the red for months. Traders are always encouraged to do their own research, form their own opinion, and manage risk in the way that best suits their circumstances.
Jackson Hole is coming and the Fed must continue with rate hikes until inflation and other metrics are under control. Equity markets are still highly correlated with the price of bitcoin, so it will be necessary to see if the SPX and DJI continue to climb or if future Federal Reserve actions begin to moderate the recent bullish momentum.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Cointelegraph.com. All investment and trading involves risk. You should do your own research before making a decision.