Bitcoin price strong rally could be nearing its end as it slowly formed a highly bearish chart pattern on the daily chart timeframe. While it is not clear when the BTC crash will happen, the upcoming Jackson Hole speech by Jerome Powell may be a catalyst.
Bitcoin Price Wedge Pattern is Ending
The weekly timeframe suggests that the recent Bitcoin price surge is nearing its end. This chart shows that the Average Directional Index (ADX) has lost momentum at 28 and is moving sideways. An asset is said to be in a strong trend when this indicator is moving upwards.
Most importantly, the weekly chart shows that it has formed a rising wedge pattern. The upper side of this wedge is formed by connecting the highest swings since March last year. On the other hand, the lower trendline links the lower highs since August 2024.
The two lines are now nearing their confluence level as the spread between the two lines narrows. These meeting points then normally leads to a strong bearish breakout.
BTC price has also formed more bearish chart patterns. Oscillators like the Relative Strength Index (RSI) and the PPO have been forming a bearish patterns known as a divergence.
The chart shows that the RSI indicator peaked at 87.75 in March last year and has formed lower highs and lower lows. Similarly, the Percentage Price Oscillator has been in a slow downward trend.
Therefore, the combination of a rising wedge and the divergences means that the Bitcoin price may be on the cusp of a strong bearish breakdown. Such a move could push it below $100.
In fact, the wedge pattern predicts a deeper dive than that. Measuring the distance in its widest part and then extrapolating the same one from the breakout point brings the target level at $60,370.
A move above the resistance at $125,000 will invalidate the long-term BTC price forecast as it will invalidate the rising wedge pattern.
Jackson Hole Symposium Could Impact BTC Price
The potential catalyst to the Bitcoin price crash is the upcoming Jackson Hole Symposium. This is an annual event that brings together central bank officials from around the world.
The most important part of the event is a speech by the Federal Reserve Chairman, in this case, Jerome Powell. This speech could be a turnaround because he may hint on whether the bank will cut interest rates as many investors expect or hold tight.
The Fed is contending with a period of stagflation as recent data show that the unemployment rate is rising and inflation is rising. Worse, inflation will keep rising as the impact of Donald Trump’s tariffs spread.
At the same time, the Fed is under increased pressure to cut interest rates from the president. Therefore, a sign that the Fed will start cutting rates will boost Bitcoin price. However, a signal for the status quo will be highly bearish and will confirm the bearish outlook. Besides, the rising odds for a cut explain why the crypto market has rallied recently.
Frequently Asked Questions (FAQs)
The long-term Bitcoin price forecast is bearish as it has formed a rising wedge and a bearish divergence.
The meeting will provide Jerome Powell a chance to share his thinking about the September meeting.
The bearish outlook for Bitcoin price will happen when it surges above the resistance level at $125,000.
crispus
Crispus is a seasoned Financial Analyst at CoinGape with over 12 years of experience. He focuses on Bitcoin and other altcoins, covering the intersection of news and analysis. His insights have been featured on renowned platforms such as BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Source: https://coingape.com/markets/bitcoin-price-wedge-pattern-points-to-a-46-crash-ahead-of-jackson-hole-speech/
