It could be a testing few weeks for Bitcoin and risk assets, market commentators say, with Fed Chair Jerome Powell due to kick off the triggers on March 8.
Bitcoin (BTC) failed to react at the March 6 Wall Street open as consensus formed around a potential violation of $20,000.
$19,000 BTC price is “breakdown target”
Data from Cointelegraph Markets Pro and TradingView tracked a limp BTC/USD as it clung to $22,400 at the time of writing.
Motionless throughout the weekend, the pair offered few trading opportunities as concerns built up over the impact of forthcoming macroeconomic data from the United States.
Good luck trading this. pic.twitter.com/nc99kF8HbS
— The Wolf Of All Streets (@scottmelker) March 6, 2023
Specifically, the February print of the Consumer Price Index (CPI), due March 14, is expected to be “hot,” or above expectations, analyst Venturefounder said.
“New Bitcoin higher low, and the bearish RSI divergence continues,” he wrote in a Twitter update on the day.
“With a hot CPI number coming and FOMC meeting later this month, March could be a bad month for risk-on assets including BTC. A breakdown from this level would target $19k BTC.”
An accompanying chart laid out the potential path to below $20,000 and also highlighted the bearish divergence in Bitcoin’s relative strength index (RSI), formed when the metric’s trajectory runs in the opposite direction to price — downward versus upward, respectively.
CPI prints tend to spark short-term volatility across risk assets, this nonetheless often short-lived, with the Bitcoin spot price then returning to previous levels.
Continuing, popular trader Crypto Ed likewise voiced belief in $19,000 marking the next local BTC price floor.
“Biggest bulltrap ever, but the bottom is in. Enjoy the coming months and don’t get fooled on the lower TF's!” part of Twitter commentary read.
Let's update this:
$21k before 25k ✅
$25k before 20k ✅
$23k before 20k
$19k before 30k
Biggest bulltrap ever, but the bottom is in.
Enjoy the coming months and don't get fooled on the lower TF's! pic.twitter.com/lySuDq5MzH
— Ed_NL (@Crypto_Ed_NL) March 6, 2023
U.S. dollar lines up key test
Turning to macro markets, trading resource Game of Trades drew attention to what it called “heavy resistance” on U.S. dollar strength.
Related: BTC price ‘in the chop zone’ — 5 things to know in Bitcoin this week
Traditionally inversely correlated with Bitcoin, the U.S. Dollar Index (DXY) now faced a key trend line retest.
“DXY is closing in on a heavy resistance zone after reclaiming the macro uptrend line,” Game of Trades wrote.
“Reaction here will be pivotal for all markets.”
Popular trader Crypto Chase, meanwhile, saw a tight trading range in place on the S&P 500, mimicking the lack of momentum on Bitcoin.
Currently utilizing the framework discussed in last night's video. I'm allowing price to do whatever it wants around here.. let it deviate, you're not missing anything.
A deviation of 4060.75 followed by a reclaim is one entry trigger (denoted by the down arrow on chart).… https://t.co/LA3vCTFuWR pic.twitter.com/ItDw1cUgBb
— Crypto Chase (@Crypto_Chase) March 6, 2023
Attention was already on the March 7 appearance before the U.S. Congress by Jerome Powell, chair of the Federal Reserve, for cues on the monetary conditions going forward.
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