The Bitcoin price is currently at a defined trading range from the performance in the daily chart.
Earlier, the attempts for higher highs came to a screeching halt mid this week as prices were pinned to move within a $1k zone with caps at around $21k on the upper hand and $20.5k on the lower end.
Although buyers are optimistic, expecting a recovery and shake off of bear pressure, BTC prices are broadly within a bear breakout formation.
From fundamental factors and trader sentiment, there could be more deleveraging in the days ahead, diffusing the upward momentum and heaping more pressure on buyers.
Bitcoin Fundamentals are Gloomy for Price
Thus far, the USD is growing from strength to strength. Even though the U.S. FED exuded confidence that inflation figures may stabilize and even drop, given the current interest rate regime, there appears to be a high chance for further rate hikes in the months ahead.
The central bank has been aggressive in readjusting interest rates, increasing funding rates to tame rising inflation that’s wreaking havoc on savings.
As it is, the USD will likely grow in strength and inflation will rise to multi-year levels. The resulting development could heap more pressure on Bitcoin.
In the next two weeks, traders will train their eyes on inflation readings. This day will coincide with the Ethereum Merge and the beginning of the Mt. Gox settlement. Victims will receive a share of the 140k BTC as compensation for the 2014 hack.
Bitcoin Price Analysis
BTC prices remain in range with identifiable reaction lines at $20.7k and $19.7k. Specifically, prices are inside the August 29 bull bar.
However, the primary trend is technically southwards, and the coin is within a breakout formation, aligning with the August 26 and 19 bear candlesticks. At current levels, traders may look to unload on every attempt higher below the $20.7k line, aligning with the trend set in motion by August 19 and 26 bear candlesticks.
The rejection of lower prices this week may offer relief as the coin move inside a tight trade range, forming a bear flag. Risk-on, conservative traders can wait for losses below $19.7k, targeting $18.5k in a bear trend continuation pattern.
Conversely, buyers may find the base for a refreshing recovery if there are welcomed gains above $21k with expanding trading volumes. Still, whether or not the downtrend will be valid would depend on how prices react at August 26 highs at $22k.