Bitcoin Next Week: Levels and Patterns to Watch

Key notes taken from the FOMC Statement are the economic recovery is still dependent on the virus spread and the progress of the vaccination, employment remains one of the key factors of monetary policies, downward risk to employment and inflation have increased, path ahead still remains uncertain.

The US Dollar Index corrected after the FOMC announcement was made and when the attack of Redditors happened on Wall Street, the movement led by thousands of amateur investors from WallStreetBets at Reddit.

The influx of traders resulted in malfunction in a popular trading app Robinhood, several other brokers alongside with crypto-currency exchanges halted deposits and new account registrations. Adding fuel to the fire, Ilon Musk and Reddit’s co-founder Alexis Ohanian tagged Bitcoin in their profile bio, resulting in a 10% surge on January 28 and another 15.25% on January 29.

As many will find these movements positive, when a group of amateurs squeeze the market and get profit, for the market itself and for the regulators such actions are considered fraudulent and cause an “unhealthy” environment. The US Securities and Exchanges Commission for sure will consider new strict regulations on admission of traders into the financial markets. Such regulations will surely have a negative impact on traders, brokerages and the market in general as it will cause the outflow of liquidity, however the price of assets will normalize in time lowering the volatility.

From the technical view, Bitcoin against the US Dollar is traded at $33707 on Overbit and is currently above the dynamic resistance, above the EMA50, although below two major Moving Averages, MA100 and MA200.

The volatility is currently low, and it looks like that the market is awaiting an opening of the new financial week There might be a slight panic and sellers may bring down the Bitcoin price to the support at $32200 where there will be another attempt of an uptrend or buyers will push the price above MA100 and MA200 brea the resistance at $34440 and proceed to $37900 and to $39600 above that. The uptrend is also supported by the Fibo 0.618 level of the last correction, however there are no clear signs of a new impulse at this point.

If the price hits the $37900 and is rejected, Bitcoin will consolidate, and if the downtrend from that resistance is high look for a formation of a harmonic Gartley pattern (yellow).

As the pattern formation is theoretical it clearly outlines support and resistances during the current price action, taking into account the fact that after the test of Fibo 0.618 level, Bitcoin didn’t show an impulse yet.