The U.S. Federal Reserve Chair Jerome Powell’s statement on rate hikes and U.S. inflation rattled the cryptocurrency market last Friday, causing Bitcoin to experience a noteworthy variation across the $26K consolidation. Jerome Powell said that the Federal Reserve might very well be planning another rate increase. Following this information, Bitcoin’s value fell below $26,000 before swiftly rising again. In fact, merchants are preparing for significant strikes when Bitcoin’s value next week enters a “calm before the storm” phase.
Bitcoin Declines in Value as Community Activities Rise
Currently, Bitcoin has been comparatively stable, frustrating day traders looking for more movement, which has resulted in a dull market mood. Additionally, businesses are hesitant to start new futures contracts, especially as open interest has decreased by $4 billion over the past two weeks.
Oddly enough, an on-chain indicator suggests that Bitcoin is currently cheap, making it a great option to go long on BTC for the upcoming week. The NVM ratio has increased to 0.52, which is below the 0.6 threshold considered to indicate undervaluation. A metric known as the “NVM ratio” measures the correlation between the logarithm of Bitcoin’s market value and the square of the number of its active daily users.
What Is The Value Of BTC After That?
The higher development line of the triangle pattern is still providing resistance for the price of Bitcoin, indicating that negative traders are still selling during upward movements. This has limited the value of BTC to a range between $25,300 and $26,800. BTC value is currently trading at $26,041, up over 0.02% in the previous day.
Bullish traders should refrain from making aggressive purchases if there is consolidation near the lower end of the triangle pattern, according to an unfavorable indication. Bulls are currently attempting to move the BTC price above the EMA20 moving average in order to support their long bets. However, the RSI stage is below the midline, providing bears an advantage in fending off an immediate surge.
If the price drops below $25,300, many traders may have their stop-loss orders activated, which could lead to a wave of long-position liquidations. This could send the value of BTC down towards the crucial $24,700 support level.
On the other hand, a closing value above the 20-day EMA might be a precursor to bullish momentum and may open the door for a rally toward the crucial $26,800 level. Additional stress-related shopping may disrupt the consolidation and raise the value to $28,000.