The price of Bitcoin fell this week, falling from an all-time high of $108,200 to below $95,000 as concerns about the bond market continued.
Bitcoin (BitcoinThey fell sharply on Tuesday as US bond yields rose to their highest levels in more than two years after stronger-than-expected job openings data.
The bond market sell-off continued on Wednesday, pushing 30-year and 10-year yields to 4.95% and 4.70%, respectively. Rising yields indicate that the market expects the Fed to maintain its hawkish stance throughout the year.
The release of the Federal Reserve minutes on Wednesday and the non-farm payrolls numbers on Friday are expected to impact the bond market further. These minutes may provide more information about the latest Fed meeting and provide hints about future monetary policy. Mercurio CEO Peter Koziakov commented in a note sent to crypto.news on January 8:
“Markets are no longer thrilled that Bitcoin is entering a new era where even the US central bank will hold a strategic reserve of Bitcoin. Instead, Bitcoin's role as a high-risk, risk-off asset has emerged once again amid signs that the US Federal Reserve may keep interest rates high for a while.” Longer than previously expected.
Some analysts believe bond yields may continue to rise as inflationary pressures persist due to policies pursued by the Donald Trump administration, including deportations, tariffs and tax cuts. In a Recent note, Mark ZandiMoody's chief economist warned that rising yields could impact the stock market and cryptocurrencies.
Legendary trader Peter Brandt remains optimistic about Bitcoin's long-term outlook even though he acknowledges the potential for near-term volatility due to bond market concerns. Brandt also noted that Bitcoin appears to be forming a head and shoulders pattern, which could indicate more volatility.
The weekly chart indicates further gains in Bitcoin prices
The weekly chart indicates a potential uptrend for Bitcoin in the coming weeks. The chart shows a cup and handle pattern, which is a classic bullish continuation pattern. Bitcoin exited the handle section in November, hitting a record high of $108,200 in December.
Currently, Bitcoin is forming a bullish pennant pattern below the major resistance level of $100,000. Such consolidations near key psychological levels are common before major upward moves. The flag consists of a long vertical line followed by a triangle pattern, indicating a potential breakout.
Bitcoin is also still above its 50-day moving average. Therefore, the coin is likely to witness a strong upward breakout in the next few weeks.
A strong breakout could occur in the coming weeks, perhaps before the inauguration of Donald Trump on January 20. If this breakout occurs, the key target level to watch will be $122,000. This estimate is based on measuring the depth of the cup and pointing it up from the point of penetration.
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