The Federal Reserve’s recent announcement has had little impact on Bitcoin’s price trajectory, which continues to exhibit a directionless trend. Despite a widely anticipated rate cut of 25 basis points, the Fed’s hawkish forward guidance has not supported the dollar, leading to its decline. Consequently, Bitcoin remains stagnant, trapped within a minor ascending channel against a larger downtrend.
Traders are currently weighing their options as technical signals emerge. A break above the established bearish trendline would suggest that the prolonged downtrend from Bitcoin’s all-time highs could be coming to an end. Conversely, a drop below the ascending channel would reinforce the ongoing downtrend, raising concerns for potential further losses.
According to analysis of Bitcoin’s daily price chart, there are promising signs for a bullish outlook. The MACD histogram, which supports medium-to-long-term analysis with a setting of (50,100,9), is nearing a crossover above zero, indicating a potential shift in momentum. Positive MACD crossovers historically denote renewed bullish activity.
Further complicating matters, the dollar index, a significant adversary to Bitcoin, has been on the decline since the Fed meeting. It fell to 98.13, marking its lowest point since mid-October, before slightly recovering to 98.36. A weaker dollar typically benefits risk assets, including cryptocurrencies like Bitcoin. Additionally, the MACD histogram for the DXY has turned negative, signaling a bearish shift.
In the broader market, the Nasdaq has regained stability after a recent drop and is currently trading above the critical 50-, 100-, and 200-day simple moving averages, which may provide positive signals for the crypto market. Interestingly, Bitcoin’s sellers appear to be losing momentum, as price levels remain steady despite recent legislative hurdles faced by cryptocurrency regulation in the Senate.
Should Bitcoin break out from its current price action, traders will be vigilant for resistance levels between $97,000 and $108,000, indicated by the same moving averages and the Ichimoku Cloud. However, concerns remain around ETF flows, which have shown a lack of significant net inflows recently. In the past month, net inflows have not exceeded $500 million on any single day, with cumulative net inflows of only $219 million since late November—far less than the billions redeemed in the preceding months.
Despite Nasdaq’s upward movement providing some optimism for Bitcoin bulls, the correlation between the two markets has become uneven. Bitcoin tends to suffer larger declines alongside Nasdaq downturns, while its gains during Nasdaq rallies have been more modest. As such, the bear case for Bitcoin cannot be disregarded; if prices break below the mini ascending channel, support could potentially drop to around $80,000.
