Potential Decline in Bitcoin Price: Analyst Predicts a Fall to $40,000

Cryptonews John Brightwater September 17, 2024

Potential Decline in Bitcoin Price: Analyst Predicts a Fall to $40,000

Summary
Bitcoin’s price is experiencing a downward trend, presently hovering around $60,650 and potentially poised to fall to $40,000 due to bearish patterns and market influences from forthcoming interest rate changes in both the United States and Japan. Analyst Zoran Kole predicts further declines, alongside the possibility of rebounding towards a breakout target of $77,400. Market volatility remains heightened as traders await key decisions from central banks.

The Bitcoin market is currently experiencing a downward trend, primarily influenced by the impending interest rate decisions from both the United States and Japan. Bitcoin’s value has declined by 5% from its recent peak of approximately $60,650, fluctuating between minimal gains and losses as of September 17th. Zoran Kole, an analyst and founder of Giga Chad Ventures, anticipates a further decline in Bitcoin’s price to around $40,000 in the near future, attributing this prediction to the formation of a bearish continuation pattern known as the “head and shoulders.” This pattern is characterized by three consecutive price peaks, with the middle peak (the “head”) being higher than the other two peaks (the “shoulders”), all aligned to a common support level termed the “neckline.” A decisive close below this neckline often indicates a continuation of the downward price movement, factoring in increased trading volumes. Kole further elaborated that a decline to around $40,000 aligns with a retest of the yearly opening price and suggests a potential bounce just below the existing yearly low of $38,500, coinciding with MicroStrategy’s average entry price into Bitcoin holdings. Recent expectations indicate that the Federal Reserve may reduce the benchmark interest rate by at least 0.25% following their two-day meeting, as recent Consumer Price Index (CPI) indicators reflect manageable inflation and a weakening labor market. Despite typically bolstering assets such as Bitcoin, trader sentiment remains cautious ahead of this decision. Compounding the market uncertainty is the scheduled meeting of the Bank of Japan on September 20th, where an anticipated rate hike could influence the “yen carry trade,” potentially raising borrowing costs and impacting the appetite for riskier investments like Bitcoin. Observers note that Bitcoin’s current decline fits within an overall descending channel resembling a “bull flag.” This pattern indicates a temporary consolidation following an uptrend, wherein price dynamics between buyers and sellers stabilize, and is often resolved through a breakout to the upside. Applying this technical analysis to the weekly charts for Bitcoin, the price target for the bull flag breakout is projected at approximately $77,400.

The cryptocurrency market, particularly Bitcoin, is heavily influenced by macroeconomic factors including interest rate decisions and inflation indicators. A bullish sentiment often leads to increased prices, while bearish trends can signal significant declines. Technical analysis plays a crucial role in predicting market movements, with patterns such as the head and shoulders and bull flags being widely utilized by traders and analysts. These patterns help to ascertain potential price levels and reversals, adding a layer of strategic insight for market participants. The Federal Reserve’s monetary policies and actions of other central banks, like the Bank of Japan, further amplify the volatility in the cryptocurrency space, which is particularly susceptible to changes in risk appetite associated with interest rates.

In conclusion, Bitcoin’s price is currently under pressure due to anticipated interest rate decisions from the Federal Reserve and the Bank of Japan. Analyst Zoran Kole predicts a potential decline to $40,000, supported by bearish technical indicators. However, the market remains uncertain, with upcoming events likely to influence buying and selling behaviors significantly. While there’s a possibility for Bitcoin to catalyze its way back upwards, potentially reaching targets as high as $77,400, risk factors remain substantial, demanding cautious strategies from investors.

Original Source: www.fxempire.com