Profit-taking Puts Bitcoin in Backseat Despite Overnight Rebound

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Bitcoin is on course to close the week in the red as it keeps failing to close above crucial resistance levels.

Even though the benchmark cryptocurrency added 4.93 percent on Thursday, its price on Friday lost a portion of those gains. A considerably strong profit-taking sentiment near $10,800 caused BTC/USD to flip lower by more than 1 percent to $10,630. The move signaled that the pair’s short-term bias remains bearish.

The seesaw price moves appeared as investors watched over a worsening US economic outlook, leading them to study how much inflation they could expect in the coming months.  A delayed inflationary outlook earlier this week prompted traders to buy the US dollar. The capital shift into the greenback weighed heavily on Bitcoin.

Now, with new coronavirus cases and strong calls from the Federal Reserve for more financial aid, investors note that both the US economy and inflation would be weaker in the coming months.

The U.S. 10-year inflation break-even rate, a barometer to measure the inflation investors expect over the next 10 years, fell to 1.6 percent on Wednesday, its lowest since early August.

That further left the Bitcoin market exposed to confusing fundamentals. If the US Congress passes the second stimulus package

, then the cryptocurrency’s bullish bias would continue running ahead. But if it does not, then Bitcoin could flip bearish, at least in the medium-term.

So far, expectations of a stimulus bill before the US presidential election in November have been low. For Bitcoin, it means more choppy price moves ahead.

Bitcoin Technical Outlook

As shown in the chart below, the BTC/USD’s technical setup is all about consolidation for now. The pair is safely trading inside a Symmetrical Triangle, for now, pulling back as it tests the upper trendline, and rebounding upon hitting the lower one.

bitcoin, btcusd, xbtusd, cryptocurrency
Bitcoin is consolidating inside a Symmetrical Triangle. Source: TradingView.com

So far, traders have used the intra-range price moves to open long positions at Triangle support to target the Triangle resistance – and to open short trades at Triangle resistance to target Triangle support.

Until further clarity from the Fed, Bitcoin expects to trade inside the pattern. It is only when the cryptocurrency reaches its apex, one can expect a bias-defining move – be it bullish or bearish.

A breakout move to the upside, meanwhile, should have traders extend their long targets towards $12,500. On the other hand, a move below the Triangle support risks a crash below $9,800.

The post Profit-taking Puts Bitcoin in Backseat Despite Overnight Rebound appeared first on BlocDesk.



Source: Profit-taking Puts Bitcoin in Backseat Despite Overnight Rebound

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