As the United States Federal Reserve signaled its desire to remain data dependent last week, a recent report on the US inflation for April has had a profound influence on the performance of Bitcoin. The data has shown that the annualized inflation remains well above the Fed’s target. Coupled with the resilient labor market conditions, the report gave reason for the Fed to continue its rate-hiking cycle, which in turn caused the US dollar to strengthen.

Consequently, BTC (Bitcoin) followed a similar pattern to most fiat currencies, weakening against rising US dollar. Credit goes to the traders who noticed a bearish pattern called “The Head and Shoulders”. This pattern indicates that in case the US dollar continues to build on its momentum, BTC would drop all the way to $24k - an area that offered resistance in the past. Therefore, what analysts are expecting is, in accordance to the interchangeability principle of trading, should Bitcoin be retested at this price, there is a good chance it can offer some support.

The events in the traditional financial markets have considerably impacted the performance of Bitcoin, reflecting the USD’s change in price. Consequently, BTC’s downside path appears to be of more influence when compared to the upside. Taking all of the above evaluation into consideration, analysts suggest that Bitcoin can find some stability once the $24k mark is reached.



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