Bitcoin was rejected as it approached the high area around its current levels. The top crypto by market cap could return to previous lows as it continues to trade in a tight range.

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The start of the Bitcoin Miami Conference 2022 could provide some support for the bulls. The event is usually full of positive announcements with a direct impact on the price of BTC.

However, the macro factors keeping Bitcoin and other risky assets from reaching new highs appear to be regaining relevance. The US Federal Reserve (FED) began its tapering process within expectations, but could become more aggressive as inflation persists.

At the time of writing, Bitcoin is trading at $43,900 with a 5% loss over the last 24 hours and 7 days.

BTC holds support on the 4-hour chart. Source: BTCUSD Tradingview

In the short term, Bitcoin needs to stay above $44,000/day to avoid further losses. Data from Material Indicators records little support for BTC price up to around $42,000. Therefore, any short-term selling pressure could drive BTC back to the bottom of its current levels.

Longer term, Bloomberg Intelligence Senior Commodity Strategist Mike McGlone said the benchmark crypto showed a buy signal on its trend signal BI. Used to gauge momentum in the market, the analyst said this is the first time since the end of 2021 that BTC has turned bullish.

As seen below, the signal has continued to make significant rallies over the last 7 years. McGlone added the following on the potential for BTC to rebound to higher levels:

In the last seven years there have been 30 signals, with a relatively high 66% of them theoretically profitable. Although macro factors remain unfavorable, and the broader pattern remains a wide $30,000-$70,000 range, the current rally may have similar legs to the August 2021 signal, which preceded a 65% rally.

Source: Bloomberg Intelligence

A strong dollar could play against Bitcoin

The US dollar rally appears to be fueling the current downward price action. Probably related to the conflict between Russia and Ukraine and the increase in inflation in the United States.

As seen below, the US dollar has been trending higher for almost a year. In May 2021, the currency hit its yearly low near the 89 mark and has been signaling further appreciation as uncertainty rises in global markets and investors look to protect their wealth.

DXY index in an uptrend on the 4-hour chart. Source: DXY Tradingview

FTP Access believe the crypto market is facing a short-term headwind with the upcoming meeting of the Fed’s Federal Open Market Committee (FOMC). As mentioned, the financial institution could become more aggressive by increasing its interest rates from 25 bps to 50 bps.

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FTX Access recommended traders to monitor the FED balance. This could give more clues about the institution’s focus on the issue of inflation and the aggressiveness of its monetary policy. FTX Access said:

It’s possible that this meeting was too early to agree on a QT plan, but given how far behind inflation they are, it seems quite likely that we will. FOMC officials have indicated to us that the balance sheet liquidation will be faster than last time (which started at $10b/mo).

This post This Bitcoin Indicator Suggests a 65% BTC Price Rise, Will It Deliver?

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