bitcoin BTC
After months of consolidation, Bitcoin price broke above the key $10,000 level. The break, as usual for the cryptocurrency market, came over the weekend, with few market participants paying attention.
Bitcoin’s break higher was highly anticipated. At a time when the stock market’s volatility stole the show from crypto traders, even the most fervent crypto speculator turned into a long-term investor as Bitcoin price simply did not move.
The recent break higher triggered a similar move on other major cryptocurrencies – Ethereum, Ripple, etc., they all followed suit. Uncertainty about the future of the USD and easy monetary policy out of the United States created a wave of USD selling across all assets.
The FOMC Meeting tomorrow is crucial from this point of view. If the Fed signals its willingness to let the USD fall even further, the decline may trigger a move higher in safe-haven assets – CHF, JPY, Bitcoin, Gold. If, on the other hand, the Fed sends an opposite message, the USD may pare some of its losses.
In any case, Bitcoin price lags other safe-haven assets. For instance, when compared with the gold price, that reached all-time highs these days, Bitcoin lags momentum.
Since the meltdown in March, when Bitcoin moved in a correlated manner with the US stock market, the price recovered from below $4,000 to $10,000. Just as the S&P500 rose close to making a new high, so did Bitcoin price.
However, by the time it reached the psychological $10,000 market, Bitcoin price stalled, and the price action entered months-long consolidation. The current break higher signals the end of the consolidation as the right-shoulder of an inversed head and shoulders pattern just ended – a bullish pattern with $15,000 as measured move.
At this point, Bitcoin price should not return below $9,000 for the inversed head and shoulders pattern to make sense. It means that the risk-reward ratio until the $15,000 take profit is good enough to be considered by both conservative and aggressive traders.
