Investing.com – sent a bullish signal over the weekend after the popular cryptocurrency broke out of a reversal pattern. Analyst and trader Kevin Svenson pointed out in one Update points out that Bitcoin has formed a “falling wedge pattern”, a technical chart formation that usually indicates an imminent price increase.
The so-called “falling wedge” is considered a signal of easing selling pressure and can be a harbinger of an upward price reversal. According to Svenson, the completion of this pattern could indicate a local low from which Bitcoin could rally.
“As long as the stock market remains stable, Bitcoin should complete this pattern soon. Although it could go down slightly again in the short term, theoretically this could have been the low. In this case, a recovery towards the upper resistance levels would be conceivable,” said the analyst.
Bitcoin is currently trading at around $62,733 and has already broken through the upward formation. However, the analyst warns that the price must continue to make higher daily lows to maintain chances of a sustained rally. However, a dip below the $57,000 mark could lead to a renewed sales surge.
“If Bitcoin falls below $57,000 it will be problematic. This would put us back in the area where we have previously seen massive price losses, potentially leading to a new low before a recovery occurs,” explains Svenson.
Svenson’s technical analysis points to a possible price rally if Bitcoin stays above $62,000. A price target of just under $90,000 is mentioned as a possible scenario.
In parallel to the chart technology, investors also focused on macroeconomic factors such as US monetary policy last week. After an unexpectedly robust performance by the US government in September, significant interest rate cuts from the US Federal Reserve () dampened demand. The prospect of less falling interest rates could encourage investors to focus more on fixed-interest investments such as government bonds.
If interest rates in the US do not fall as expected, this could also increase pressure on Bitcoin, as rising or stable interest rates tend to shift capital from riskier assets such as cryptocurrencies to safer assets.
Raphael, president of the Atlanta Federal Reserve, expressed openness Thursday to loosening monetary policy more slowly or even leaving interest rates unchanged if recent signs of higher inflation and a robust labor market continue.
“I have no problem skipping a session if the data suggests it,” Bostic said after September’s (CPI) was surprisingly strong. The CPI rose 0.2 percent in September, remaining at the previous month’s level but above the 0.1 percent expected. That brought the annual rate to 2.4 percent, slightly below August’s 2.5 percent but higher than the forecast 2.3 percent.
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