Although the 'golden cross' pattern, considered technically positive for Bitcoin, remained valid only for a short time, rapidly growing expectations of a Fed rate hike increased pressure on the cryptocurrency market.
Yesterday, Bitcoin ($BTC) surged to $79,837, causing the 50-day exponential moving average (EMA) on the daily chart to cross above the 200-day EMA. This formed a 'golden cross,' a bullish market signal. However, subsequently, $BTC retreated to around $77,438, causing the 50-day EMA to fall back below the 200-day EMA, and the technical signal quickly lost its relevance.
Bitcoin Experienced a Correction After Inflation Data Release.
The decline in Bitcoin's price coincided with a period of sharp revision in expectations regarding the Fed's actions following the release of US inflation data. The US core Consumer Price Index (CPI) rose 0.3% month-over-month, exceeding market expectations of 0.2%. After this, the probability of a 25 basis point Fed rate hike at the next meeting increased from approximately 69% post-CPI data release to 86.5%, according to CME FedWatch data.
Growing expectations of higher interest rates pressured risk assets, including Bitcoin, resulting in a significant loss of $BTC's earlier gains.
However, technical indicators suggest that the medium-term outlook for Bitcoin has not yet turned completely negative. On the four-hour chart, the 50-period EMA is still above the 200-period EMA, and the 'golden cross' pattern remains intact on this timeframe. The daily ADX indicator, at a level of 45, also points to a relatively strong current trend.
On the other hand, the drop in the four-hour RSI to 43.3 indicates a significant weakening of short-term bullish momentum.
*This is not investment advice.
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