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14.06.2023 11:46 AM
Bitcoin's bullish impulse failed: Is the bearish trend intensifying?

The first important event of the current week has passed and brought even more positivity to the global financial markets. Following the inflation level, the Federal Reserve should have its say, and there are all reasons to believe that positive forecasts will also come true here.

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Despite the prevailing positivity in the global markets, Bitcoin and other cryptocurrencies are under strong selling pressure. The initial bullish impulse of BTC was completely absorbed by sellers, which may indicate a worsening of corrective trends. However, it is likely that the cryptocurrency will have another opportunity to resume its upward movement.

Fed's Reaction

The global financial markets awaited data on U.S. inflation to get an idea of the Federal Reserve's future actions. According to forecasts, inflation was expected to decline from 4.9% to 4.1%. The results exceeded expectations, and the Consumer Price Index (CPI) fell to 4%, which became an additional source of positivity.

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Following the CPI data, a statement from the Federal Reserve is expected, which is highly likely to announce a pause in the rate hike cycle. Considering the weak labor market and declining inflation, over 95% of investors are confident that the rate will remain unchanged. This is positive news for the markets as the pause will increase liquidity and provide more room for economic recovery.

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The Fed meeting and the announced theses will have a decisive impact on the state of the U.S. and global economy in the near future, so another stage of volatility surge can be expected. For Bitcoin and the cryptocurrency market, this is a second chance to make a bullish leap towards the $26.5k level.

Bearish Trend in the Bitcoin Market?

Bitcoin reacted positively to a significant decrease in the inflation level, but it failed to realize the bullish impulse. Over the past 24 hours, the BTC price changed by only 1%, with trading volumes dropping to $12 billion. At one point, the cryptocurrency managed to reach the $26.5k level, but sellers subsequently pushed buyers aside and pushed the price down to $25.9k.

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As a result, an uncertain "doji" candlestick formed on the daily BTC/USD chart. Despite yesterday's extremely positive news, it can be said that sellers dominated over buyers. Bitcoin bulls failed to develop the upward movement, and as a result, it was engulfed by bearish volumes.

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As of June 14, the asset is trading near the $25.9k level. The results of the Fed meeting can become another catalyst for the bullish movement, but yesterday's sellers' reaction can significantly reduce the accumulation of bullish volumes. This means that today's upward movement may be weaker than yesterday's.

BTC/USD Analysis

Over the past four days, we have witnessed a balance between bulls and bears. However, over the past two days, buyers have increased their volumes and attempted a retest of important resistance levels. It is likely that with the accompaniment of statements from the Federal Reserve, the bulls will launch another attack on the $26.5k level.

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Technical indicators indicate consolidation with growing bullish signals. The RSI index is moving flat, but the stochastic indicator has completed a bullish crossover, which may indicate another stage of upward movement. The key target for the bulls will be to establish and maintain a position above the $26.5k level for further movement towards $27k.

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Despite the prevailing positivity, the bears will also launch an attack and attempt to push the price below the $25.5k level. This will pave the way to the main target of sellers, which is the range of $24.6k–$25k, where the foundation of the cryptocurrency's upward trend lies.

Conclusion

The Bitcoin bull market is gaining momentum thanks to positive news. However, the development of upward movement is unlikely as long as the asset remains below the downward trend line. The bullish volumes are insufficient to establish a position above $26.5k, and therefore, it is highly likely that Bitcoin will remain within the current range.

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