- Bitcoin is flashing some signs of short-term strength as it rebounds from its daily lows
- This rebound, although strong, has not been enough to send it past any crucial support levels as of yet
- It also led BTC to see a strong rejection at just below $11,600, which is a sign of weakness behind this movement
- This rally came about as macro assets responded bullishly to the Fed Chairman’s speech regarding the Fed adopting a 2% average inflation target
Bitcoin and the entire cryptocurrency market responded positively to the Fed Chairman’s speech earlier today regarding how the central bank wants to respond to inflation of the US Dollar.
During the speech, he also noted that the central bank is setting its sights on a 2% annual inflation target.
This speech drove macro asset prices higher, with Bitcoin, gold, and other so-called “hard assets” all gaining.
This momentum has not been enough, however, to send the benchmark cryptocurrency above a few key levels that have been suppressing its strength.
As such, it is a strong possibility that BTC will see further near-term weakness before it is able to push any higher.
Bitcoin Faces Rejection Following Fleeting Pump to $11,600
Earlier this morning, Bitcoin’s price was able to pump as high as $11,600 following the speech, with this rally marking a break above both a descending trendline and a key horizontal resistance level.
Bulls were not able to sustain this momentum, however, and the crypto subsequently declined down to lows of $11,350.
This is around where it is currently trading, with bulls and bears both vying for control over its near-term trend.
Until it can firmly break above $11,500 and shatter the descending trendline that has been guiding it lower over the past few days and weeks, there’s a strong possibility that further downside is imminent.
Here’s How Low BTC May Plunge If Bulls are Unable to Take the Reigns
To justify this bearish outlook, he points towards a strong descending trendline that has been formed in the time following BTC’s rejection at $12,400. This can be seen in the below chart:
Image Courtesy of Teddy. Chart via TradingView.
Because $10,000 is a historically and psychologically important support level, a dip to the liquidity that exists here may help send it surging higher.
Featured image from Unsplash. Charts from TradingView.