It could be a testy few weeks for bitcoin and risk assets, according to market watchers, with Fed Chair Jerome Powell on March 8.
March 6 Wall Street did not respond at the open as a potential breach of $20,000 was settled.
$19,000 BTC Price Is “Allocation Target”
Data from Cointelegraph Markets Pro and TradingView were weak for BTC/USD as it touched $22,400 at the time of writing.
Unmoved throughout the weekend, the pair offered few trading opportunities amid concerns over upcoming macroeconomic data from the United States.
The print of February’s consumer price index (CPI), due on March 14, is expected to be “warm” or beat expectations, analyst Venturefounder said.
“New Bitcoin higher and lower, RSI divergence continues,” he wrote in a Twitter update that day.
“With the hot CPI number and the FOMC meeting later this month, March could be a bad month for risk assets, including BTC. A break from this level would target $19,000 BTC.
The accompanying chart outlined a potential path below $20,000 and also highlighted a critical divergence in Bitcoin’s Relative Strength Index (RSI), which occurs when the metric’s trajectory goes in the opposite direction to price – down and up, respectively.
CPI prints usually cause short-term volatility in risk assets, but this is often short-lived and the Bitcoin spot price returns to previous levels.
Continuing, popular trader Crypto Ed also believed that $19,000 marked the next local BTC price ground.
“Biggest bulltrap ever but the bottom is in. Enjoy the coming months and don’t be fooled by lower TFs!” read some of the Twitter comments.
The main test is based on the US dollar
Looking to the macro markets, trading source Game of Trades pointed to what it called “significant resistance” to the strength of the US dollar.
Related: BTC Price in ‘Chop Zone’ – 5 Things to Know in Bitcoin This Week
Traditionally inversely correlated with Bitcoin, the US Dollar Index (DXY) has now encountered a major trendline retest.
“DXY closes at major resistance after retracing macro uptrend,” wrote Game of Trades.
“Response here will be very important for all markets.
Meanwhile, popular trader Crypto Chase saw a narrow trading range in the S&P 500, mimicking bitcoin’s lack of momentum.
Already on March 7 in front of the US Congress, Federal Reserve Chairman Jerome Powell pointed to future monetary conditions.