Bitcoin Faces Resistance At $29.5K! Is ‘Sell the Rumor’ Event Set To Begin?

It has been a whirlwind week for the cryptocurrency market as Bitcoin (BTC) struggles to maintain its position above the much-anticipated $30K mark. The flagship digital currency has faced significant volatility recently after the Federal Reserve announced its decision to increase interest rates by 25 basis points. Market analysts are now speculating this could trigger a “sell the rumor” event as Bitcoin surged higher before the announcement. 

Bitcoin Gets Trapped Under Bearish Pressure 

Bitcoin and other crypto experienced an uptick today following the most recent decision on monetary policy by the Federal Reserve. However, the BTC price continued to face difficulties surpassing a crucial threshold. Crypto traders are now keenly anticipating next week’s inflation data release.

While Bitcoin’s value remained largely unchanged right after yesterday’s FOMC meeting, it experienced a surge in the subsequent hours, successfully climbing back to the $29,000 mark. Similarly, altcoins have exhibited a positive trend, showcasing modest gains on a daily basis.

In a similar move, the European Central Bank has also implemented a rate increase, albeit at a smaller magnitude than in recent months. The ECB opted to boost its three primary interest rates by 0.25 percentage points, a more modest adjustment compared to the larger increases implemented during the three previous meetings.

Matrixport, a crypto services provider, suggests that if Thursday’s rate increase turns out to be the final one in this cycle, Bitcoin could witness a 20% surge, potentially reaching $36,000. Even though trading volumes have experienced a slight dip, the upward trajectory appears to face minimal resistance.

What Is Next For BTC Price?

Bitcoin’s price movement has created a symmetrical triangle pattern. Typically, this pattern serves as a continuation signal, with the price breaking out in the direction it was following prior to the formation. The nearly flat 20-day exponential moving average at $28,736 and the relative strength index close to the midpoint do not provide a definitive edge to either bulls or bears.

Michael Safai, from crypto trading firm Dexterity Capital, said, “It felt like a mixed outcome for crypto investors. While the language on future rate hikes was softened, the Fed left the door open by saying that future decisions will be macro data dependent. Traders have paid more attention to Fed meetings than CPI data releases in recent months. That could flip-flop, if traders believe that inflation readings will foreshadow the Fed’s next move.”

As of writing, Bitcoin trades at $28.9K, climbing over 2% in the last 24 hours. If the price heads downwards and breaches the triangle’s lower boundary, it would indicate the beginning of a short-term correction phase. A breakout below the EMA-20 trend line will slump the asset near the weekly support zone of $27K-$27.5K.