Bitcoin extends consolidation as neutral FOMC decision fails to spark a relief rally. What's next?

<p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">Bitcoin whipsawed yesterday following the FOMC decision. The Fed kept interest rates unchanged as widely expected and Fed Chair Warsh said a whole lot of nothing. Overall, the decision was a neutral event but failed to trigger a sustained relief rally despite a drop in Treasury yields.</p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: normal; font-size: 15px;">Meanwhile, the US-Iran negotiations remain at a stalemate, although we’ve seen a stronger push this week. Semafor just reported that the Trump administration is pursuing a temporary peace deal with Iran, according to officials. However, if diplomacy fails, the US could resume military operations shortly after the midterm elections, pending Trump's authorization. </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">We have a packed US economic calendar today, with GDP, PCE inflation and Jobless Claims due for release. However, the figures are unlikely to materially shift Fed expectations, given yesterday’s upward revision to the Fed’s growth outlook and the fact that PCE can be estimated fairly accurately using the CPI and PPI data. The Jobless Claims data should therefore be the most important, although we would need a meaningful deterioration to move markets, as traders got used to strong data. </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">A surprise breakthrough in US-Iran negotiations remains the key wildcard, as it would drastically change the future outlook, leading to better growth expectations and lower inflation concerns. In such a scenario, we can expect Bitcoin to rally into new highs. </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;"> </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">BITCOIN TECHNICAL ANALYSIS – DAILY TIMEFRAME</p><p></p><p>On the daily chart, we can see that <a href="https://www.tradingview.com/symbols/BITCOIN/" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">Bitcoin</a>is still consolidating around recent lows. We have a downward trendline now defining the bearish structure. If we get a pullback, we can expect the sellers to lean on the trendline, with a defined risk above it, to position for a drop into the 75,000 level. The buyers, on the other hand, will want to see the price breaking higher to pile in for a rally into the 98,000 level next.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">BITCOIN TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME</p><p></p><p>On the 4 hour chart, we have a minor upward trendline defining the recent price action. The buyers will likely step in around the trendline, with a defined risk below it, to keep targeting a pullback into the downward trendline. The sellers, on the other hand, will look for a break lower to pile in for a drop into the 75,000 level next.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">BITCOIN TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME</p><p></p><p>On the 1 hour chart, there’s not much we can add here as the buyers will have a better risk to reward setup around the trendline, while the sellers will need a break to open the door for new lows. The red lines define the <a href="https://investinglive.com/Education/trading-tip-know-the-average-daily-range-adr-20220207/" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">average daily range</a> for today.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">UPCOMING CATALYSTS</p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: 103%; font-size: 15px;"><a href="https://investinglive.com/EconomicCalendar" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">Today</a> we get the US GDP report, the US PCE and the latest US Jobless Claims figures. Tomorrow, we conclude the week with the US Employment Cost Index.</p> This article was written by Giuseppe Dellamotta at investinglive.com.