Bitcoin (BTC) Struggles to Extend Gains Amid Mixed Signals
Despite favorable conditions last week—including a weaker US dollar and improved risk sentiment—Bitcoin failed to sustain its upward momentum, entering a phase of consolidation. Technically, traders are now watching for a breakout direction from this range-bound movement.
Key Factors Influencing Bitcoin’s Price
- Fed Policy Shift:
The Federal Reserve’s 25-basis-point rate hike and dovish pivot ("additional policy firming" vs. "ongoing hikes") initially weakened the dollar. However, concerns over banking sector instability and Treasury Secretary Yellen’s remarks on uninsured deposits triggered a 7% intraday BTC pullback. Risk Sentiment Swings:
- Rebound: Yellen’s subsequent assurance of "additional measures to stabilize banks" fueled a Thursday recovery.
- Volatility: Friday saw a rally to $29,380 (new local high) followed by a 3% drop amid Deutsche Bank contagion fears and subsequent official reassurances.
- Macro Backdrop:
While the S&P 500 rose 1.4% and the dollar index fell 0.72%, Bitcoin underperformed—partly due to the White House’s critical stance on crypto in its Economic Report of the President, labeling it a speculative asset with "no meaningful benefits."
Bitcoin (BTC) Technical Analysis: Range Breakout Ahead
4-Hour Chart Observations:
- Current Range: $26,700–$29,000
- Bullish Scenario: A breakout above $29,000 could target $30,000.
- Bearish Scenario: A drop below $26,700 may signal deeper corrections.
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FAQ Section
Q: Why did Bitcoin fail to rally despite a weaker dollar last week?
A: Banking sector uncertainties and regulatory skepticism offset dollar weakness, keeping BTC range-bound.
Q: What’s the significance of the $29,000 resistance level?
A: It’s the upper boundary of Bitcoin’s consolidation range; a decisive break could confirm bullish momentum.
Q: How does Fed policy impact Bitcoin?
A: Dovish shifts (like March’s) typically weaken the dollar, supporting BTC—but secondary risks (e.g., banking crises) can complicate this correlation.
Sources: Bloomberg, IG
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Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Cryptocurrency trading involves substantial risk.
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