- Bitcoin price is still stuck in consolidation, creating a tighter range as it approaches the peak of the ascending triangle formation on the 1-hour chart.
- This type of price action suggests that buyers and sellers are playing a close game of tug-o-war, but only one side can prevail.
Bitcoin price could be due for a downside breakout, as the freshly released FOMC meeting minutes are in favor of more USD gains.
Waiting for a Break
The minutes of the U.S. central bank’s monetary policy meeting last month confirmed that the economy is on track to seeing an interest rate hike before the end of the year. This makes the Federal Reserve the only hawkish central bank in the bunch, as other monetary authorities are mulling additional easing measures.
This also means that the U.S. dollar could enjoy strong rallies until the end of the year, as higher returns could spur demand for U.S. securities and the currency. While the Fed reiterated that they might take their time before announcing further rate hikes afterwards, the U.S. dollar could still be able to bank on the fact that a tightening cycle is about to begin.
This could mean more bitcoin price weakness relative to the U.S. dollar, especially since the cryptocurrency is in the process of returning its gains from an unprecedented rally earlier in the month.
Technical indicators are giving mixed signals, as the moving averages are gearing up for an upward crossover to possibly indicate that an upside breakout is also possible. Stochastic appears to be on the move down, suggesting that sellers are in control, while RSI is on middle ground and barely offering any strong directional hints.
Meanwhile, the average directional index is on the move down, reflecting further consolidation. The ADX is heading deeper below the 50.0 level, although a breakout in either direction could push it back up.
Charts from BitStamp, courtesy of TradingView