Bitcoin Price Feels the Heat as the DOJ Probes Fed Chair Powell
After the macroeconomic risks have returned, the Bitcoin price continues to stay under key resistance levels. It continues to compress. The external pressure on the U.S. monetary system credibility seems to be worsening.
The Bitcoin DOJ investigative process does not directly affect Bitcoin. Still, it may create Bitcoin priced friction, especially now that most risk assets are at an extreme, as the investigation creates more institutional Ice-ness.
Regardless of the Bitcoin DOJ investigative process not being directly aimed at Bitcoin, it creates funnels to macroeconomic conditions surrounding and directly affecting Bitcoin. The U.S. dollar/monetary system autonomy directly affects the way people invest and/or allocate capital.
The more there are control mechanisms, or a subdivision of the U.S. dollar, by way of fiat to Bitcoin to control risk, the more there tends to be a subdivision of hard assets and an increase in the value of the U.S. dollar.
Bitcoin is absorbing macro tension more structurally than impulsively. The asset has remained technically constrained, showing conditional demand. As long as confidence in policy independence remains low, Bitcoin behaves increasingly as a macro hedge.
While this does not guarantee immediate upward pressure, it increases the chances that a period of price consolidation ends more upwards than downwards.
At the moment BTC is under the important price of $92,000, which still controls the short-term direction of the asset. The price has been stuck in the range of $90,500 to $92,000 having not been able to break $92K, which means that sellers are defending this price point.
Meanwhile, buyers are defending the $88,000–$88,500 price range, balancing the structure of the market. Each sell-off has been above the previous low, which is compression, not rejection. This is more indicative of accumulation than distribution.
BTC’s cup-and-handle pattern started back in mid-December. The rounded bottom indicates the market is pushing back and forming a bottom. The handle shows the market is consolidating. The pullback, higher lows, and ascending support show the market is responsive to buyers.
BTC is currently trading around $91,400 and is just under $92,000. The market’s inability to push past higher levels indicates that the market is absorbing the remaining levels of supply rather than running out of supply.
If BTC flips $92,000 from resistance to support, the pattern will be complete, giving BTC the target of $95,000. The market currently has a 57% chance BTC reaching $95,000 in January, and a chance less than that of BTC reaching $100,000.
To summarize, the BTC price structure shows that the market is disciplined despite the surrounding uncertainty. The combination of market compression under $92,000 and the ascending support give BTC the opportunity to break resistances.
Breaking and holding above $92,000 offers the chance for both the technical and macro factors to push the market higher. If the market cannot maintain higher lows, it will show that the institutional hesitance is a limiting factor in the remaining upside.
