Bitcoin price (BTCUSD) has hit a wall. After months of rallying, the price has found it impossible to move above the $10,000 resistance level. As of 07:22 GMT, the BTCUSD pair was trading at 9,496, which is a few points below the important resistance of 10,000.
Why is Bitcoin price in a holding pattern?
The price of Bitcoin has been on a strong upward trend since March 20, when it dropped to a low of $3985. The price moved above $10,000 this month as the market reacted to the halving event. As I had written before, the price of Bitcoin tends to rally before this event.
The main reason why BTC is struggling to move above this resistance is that there is indecision in the market about where the price will go. While bulls believe will rally, bears in equal measure are trying to resist the price.
Still, Bitcoin price has another catalyst. In recent months, central banks have powered-on their money printers. In the United States, the Federal Reserve is printing billions of dollars every day. This has seen its increase its balance sheet to more than $6.9 trillion. And, analysts believe that at this pace, the amount will reach $10 trillion by the end of the year.
Negative interest rates is another catalyst. While the Fed has said that it is not considering negative rates, a substantial amount of market participants believe that this will happen. Just last week, the Fed futures rate showed that participants were pricing-in negative rates.
Meanwhile, the Bank of England is not ruling out negative rates, according to Andrew Bailey. Other central banks like those in New Zealand and Sweden too are said to be considering these rates.
Bitcoin price tends to be sensitive to these issues. This means that after the halving, traders are now solidly focused on the monetary policy issues.
What are Bitcoin charts saying? Let us look at the daily and weekly charts.
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Bitcoin price daily chart
On the daily chart, we see that Bitcoin price has struggled to move above the $10,000 mark. The price is still above the 100-day and 50-day exponential moving averages. At the same time, volatility, as measured by the Average True Range (ATR) has been relatively low. Also, the pair is forming an ascending triangle pattern. This implies that it is likely that Bitcoin price will break out in the upside.
BTCUSD weekly analysis
On the weekly chart, we see that the ascending triangle pattern is also happening. Most importantly, the price has just emerged from the Ichimoku cloud. This is an indicator that Bitcoin price may also breakout in the upward direction.