Bitcoin rose last week, and was able to record the second consecutive weekly gains, after having rebounded from a healthy technical support level.The crypto-currency followed the upward movements in the stock market because of signs of an economic recovery, and optimistic employment data.In the run-up to the monthly two-day meeting of the US Central Bank, BTC will be traded carefully.
Despite the slump at the end of last week, Bitcoin closed the Seven-day period of time with a green candle, the ticking 3.21 percent higher.
Thus, the crypto-currency was recorded for the second consecutive weekly gains, after falling the previous month, up to 8.680 dollars. Technical factors, such as a solid medium-term resistance level near the $10,000 mark, and an equally strong support above the 8.500 $-brand, supported the Bitcoin Trend in the margin.
Bitcoin is trending within a tight weekly range | source: TradingView.com Coinbase
Nevertheless, the crypto-currency is heading towards a week in which the Federal Reserve, the economic reality will continue to brighten. On Tuesday and Wednesday, the Central Bank will hold its two-day monthly meeting.
The outcome of the meeting will decide on the next direction of the Bitcoin prices.
Decisive weeks for Bitcoin
The Meeting of the Fed is of vital importance, since it enables investors to plan their transactions according to the economic forecasts.
If the Central Bank sees a slowdown ahead, then they could drive people in safe assets, mainly cash. If you see a slow growth, but still insist to support the market with a stimulus program, then this could increase the appetite for risky assets.
Bitcoin acts, depending on the macroeconomic Situation, both as a safe haven or as a risky investment. Investors choose the crypto-currency, to manage their portfolio risks.
That is, If the Fed keeps its interest rates still close to Zero and the endless bond buys, could you increase the attractiveness of Bitcoin to an oversized share of the market.
The reason is the recovery of the stock market itself is partially. Since March 2020, the Benchmark S&P 500 is a V-listed-shaped recovery.
As a result, some investors could see a sustained bull run. At the same time others are sceptical about the longevity of the upward movement is – according to them, she was taken away from “reality”.
SPX Performance since the sell-off in March 2020 | source: Tradingview.com
The Fed could a lot of this doubt until Wednesday to dispel. The economic recovery should be substantial and continue through lower interest rates and fiscal incentives will be supported, could rise in the S&P 500 more. In return, Bitcoin could rise on the basis of similar catalysts.
This would mean a clear breakout above the $ 10,000 resistance brand. This would bring more traders to the crypto-currency on the rising prices – in particular, after a General consensus is that BTC will have reached by the end of this year to 20,000 $.
In the meantime, Bitcoins risked upside rally exhaustion, when they decoupled from the US stock. That puts the pressure on the technical supports in the vicinity of $8.500, $8,000 and $7,500 in order to keep the profits of the crypto-currency.
This should fail, could Bitcoin in the last Support-repetition test of its long-term moving average (orange wave) in the direction of the 6,300 $ fall.