- Bitcoin trades at above $19,000 in a bear market and support area
- 200-day moving average joined resistance for Bitcoin
- A breakout of the inside bar pattern could accelerate bear weakness
Bitcoin BTC/USD is trading at 19,580. At the current price, the world’s largest cryptocurrency is at support. However, Bitcoin may fall below support as more bearish indicators emerge. Fundamentals and market sentiment are also weighing on Bitcoin price.
The price of Bitcoin has been so far pegged on the state of the economy. Rising inflation is a bear trigger for Bitcoin. Inflation ignites faster action by central banks to tighten policy. On Thursday, data showed that the Fed’s key inflation gauge rose by 4.7% in May. Despite being lower than estimates of 4.8%, the rate was at levels only seen in the 1980s.
In its comments, the Fed hinted at faster rate hikes to tame costly inflation. Markets are anticipating a rate hike of up to 75 basis points in July. The faster rate action would be bearish for Bitcoin. Current technical indicators suggest that another bear leg is on the horizon.
The 200-day moving average offers Bitcoin resistance for the first time
The weekly chart gives the long-term trend of Bitcoin. The 200-day moving average joined resistance for the cryptocurrency at key support. An RSI reading of 25 may suggest the cryptocurrency is oversold. Nonetheless, this does not mean the bear’s weakness is over. A short-term appreciation in price may be met with a sharp downturn.
Bitcoin is also forming an inside bar pattern at key support. We need to see if the weekly candlestick breaks below. A break of the inner bar on the downside and below the support will intensify the bear market. The next support is around 11,661.
Concluding thoughts
The 200-day moving average has joined Bitcoin resistance for the first time. The price faces bear pressure at the support. An inside bar breaking out to the downside will weaken the cryptocurrency further.
