After the declaration of Jerome Powell, president of the FED, in the framework of the Jackson Hole celebration, the US dollar resumed the bearish trend in the medium term, which generated a small recovery in the price of Bitcoin.
Powell has admitted that the efforts made to cushion the Coronavirus effect have not been enough. Therefore, they have rethought the Federal Reserve’s vision of the annual inflation target of 2%, seeking to encourage an increase above this level for some periods.
With this scenario, a continuation of the dollar devaluation is assured. But, in the meantime, assets such as gold and Bitcoin will continue to gain ground as a hedge against inflation.
But what does the BTC price chart tell us? Let’s go to it to find out.
Technical Analysis of the Bitcoin Price
On the weekly BTC vs. USDT chart, we see a clear upward direction in the medium term, as a result of rising highs and lows.
The 8-week EMA and 18-week SMA moving averages are crossed upwards following this trend, and are likely to function as dynamic supports in the price reversal.
This uptrend will remain intact as long as the $9,208 support is not crossed.
The setback we are observing could already be catalogued as valid, as it already corrected a little more than 38.20% of Fibonacci, a tool widely used in technical analysis.
A more reliable correction for analysts is to visit the 61.8% Fibonacci. In the case of the current Bitcoin price, this drop would be the visit of the surrounding area at $10,380. One that, by the way, has not been tested after the escape to $12,440.
Either way, the previous uptrend will always be the most important thing. Before fighting it, it is best to position yourself in its favor, and now is a good time to do so.
Key Trigger Could Lead Bitcoin to Try New Levels
From the daily chart we can clearly observe the short term bearish trend, capable of breaking through continuous support. The 8-day EMA and 18-day SMA moving averages are following this direction.
At the moment, the odds are in favor of a continued downward trend, but it may not be for long. This view will change if the $11,800 resistance is broken.
The 200-day SMA is currently bullish, supporting the large appreciation of the Bitcoin price over the past few months.