Bitcoin ‘bear flag’ breakdown targets $15K as US dollar hits 20-year high

On Sept. 6, Bitcoin (BTC) value crumbled beneath $20,000 and the asset appears to be like able to endure additional decline in September resulting from a robust U.S. greenback and an ominous technical evaluation sample.

Bitcoin eyes $15,000 subsequent

From a technical perspective, Bitcoin dangers dropping to $15,000 or beneath within the coming weeks after breaking out of its prevailing “bear flag” pattern.

For the unversed, bear flags type when the worth consolidates greater inside a parallel, ascending vary after a robust downtrend. They usually resolve after the worth breaks beneath the decrease trendline and falls by as a lot because the earlier downtrend’s size.

BTC/USD each day value chart that includes ‘bull flag’ sample. Supply: TradingView

Bitcoin has entered the so-called breakdown stage of its bear flag sample, with its draw back goal lurking south of $15,000, as illustrated within the chart above.

Money is king

The prospects of a weaker Bitcoin heading additional into 2022 are rising primarily due to a worsening financial backdrop.

Bitcoin’s 60% year-to-date value decline is without doubt one of the unlucky penalties of the Federal Reserve’s hawkish policy to bring inflation down to 2% from its present 8.5% stage. Intimately, the U.S. central financial institution has raised its benchmark rates to the two.25%–2.5% vary by way of 4 consecutive hikes in 2022.

The hikes have boosted the urge for food for cash-based securities over riskier property like Bitcoin.

As an example, U.S. banks with financial savings accounts provide shoppers an annual share yield of two% or extra from round 0.5% firstly of this 12 months, knowledge shows.

Related articles

In the meantime, a Goldman Sachs evaluation shows that mutual funds with $2.7 trillion in fairness below administration have elevated their money holdings by $208 billion within the first half of 2022, the quickest allocation charge so far.

Mutual funds asset rotations famous in HY1/2022. Supply: Goldman Sachs

The broader demand for money has helped the U.S. greenback index, which measures the dollar’s power towards a pool of prime foreign exchange, climb to 110.55 on Sept. 6, its highest stage since 2002.

DXY each day value chart. Supply: TradingView

Because of this, money has drastically outperformed shares, Bitcoin, Ethereum, copper, lumber and different property in 2022.

Associated: A range-break from Bitcoin could trigger buying in ADA, ATOM, FIL and EOS this week

This development might proceed, provided that the Federal Reserve plans to proceed its rate-hiking spree, based on Jerome Powell’s statements on the current Jackson Gap symposium.