- Bitcoin is currently in a consolidation phase, oscillating between US$60k and $70k, struggling to find a clear direction.
- Going forward, important to see how the Federal Reserve reacts to inflation data, Swissblock analysts say.
- Expect ongoing market volatility as BTC approaches key support at US$60k, with a risk of falling to $52k.
Analysts at wealth manager Swissblock said Bitcoin is lacking ‘clear direction’ amid the choppy period it has been in for some time now.
They said there is technical support at the 50-day EMA and stronger support at the US$60k (AU$91.6k) level. After a rapid 92% rally over six weeks, BTC is now in a consolidation phase. If it falls below US$60k, it might quickly drop to US$52k (AU$79.4k), a key support and resistance level historically. They said, conversely, breaking above US$67k (AU$102k) could propel it towards US$74k (AU$113k).
Related: Bitcoin Dominance Peaks: Analysts Predict Imminent Altcoin Rally
Fed Caught Between a Rock and a Hard Place
According to Swissblock, the Federal Reserve’s financial stability report indicates that the banking system has coped well with a record series of interest rate hikes, without triggering a recession – demonstrating the economy’s resilience despite tight monetary policy.
The Fed now faces a dilemma between fostering economic growth and curbing inflation. While recent growth data suggests room for easing monetary policies, ongoing inflation pressures might require additional adjustments to stabilise inflation at targeted levels, the analysts wrote in a recent note.
Persistent inflation concerns may necessitate further policy adjustments to achieve the desired inflation rate.
Swissblock Analysts Advise to Prepare for Volatility
As BTC’s price currently fluctuates between US$60k and US$70k, it is struggling to break out of this range. The Relative Strength Index (RSI) is near 50%, indicating a balanced market momentum, Swissblock stated.
They added, a decline towards the US$60k support could trigger a significant drop to US$52k. On the other hand, if BTC surpasses US$70k, it could reach a new all-time high, potentially introducing substantial volatility. Given the market’s current uncertainty, short selling is risky, the analysts concluded.
Crypto analyst Miles Deutscher agrees, sharing with his 500k followers that he is sitting on the sidelines currently:
Of course, it all depends on your cost basis, for those who have not been accumulating BTC during the 2023 bear, they could see opportunities here. After all, Bitcoin is down 14% from its all-time high in March.
If you’re unsure how to start with crypto, check out our guide to analysing crypto before you buy.
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