Bitcoin price held steady on Tuesday morning as investors reflected on the latest developments in the United States, where the longest government shutdown is about to end, removing one of the biggest risks in the market this year. The coin jumped to a high of $106,400, much higher than last month’s low of $98,600.
End of the government shutdown
The main catalyst for Bitcoin and other cryptocurrencies this week is that the longest government shutdown in US history is about to end after a group of eight Democratic senators switched sides and voted for the end of the shutdown.
For starters, this shutdown started a few weeks ago when the two sides disagreed on how to keep the government funded. Republicans preferred a clean funding bill, while Democrats wanted to use leverage to undo some of the policies that Republicans implemented.
The end of the government shutdown benefits Bitcoin by removing one of the biggest risks in the market. It will also help traders and policymakers in terms of official macroeconomic numbers.
On the positive side, there are signs that the Federal Reserve will continue to cut interest rates in the coming meeting. Data on Polymarket shows that the odds of a cut have jumped to over 70% from last week’s low of 65%.
Bitcoin and other altcoins normally do well when the Federal Reserve is cutting rates. Indeed, the BTC price surged to a record high last month, a week after the bank delivered its first cut of the year.
Bitcoin price weekly chart analysis
The weekly chart shows that the Bitcoin price has remained on edge in the past few weeks. On the positive side, the coin has remained consistently above the 50-week Exponential Moving Average (EMA). That is a sign that bulls remain in control for now.
However, a closer look shows that the coin has formed a double-top pattern at $124,400 and a neckline at $107,485. A double-top is one of the riskiest patterns in technical analysis.
At the same time, the Relative Strength Index (RSI) and the MACD indicators have formed a bearish divergence pattern. This pattern happens when the two indicators move downwards as an asset’s price rises.
Meanwhile, the coin has also formed a rising wedge, which is made up of two ascending and converging trendlines. This pattern also often leads to more downside over time.
As such, this chart points to more downside in the near term, potentially to $100,000 and below. The bearish outlook will become invalid if the coin moves above the key resistance level at $124,380.
BTC price daily chart analysis
The daily chart shows that the BTC price has rebounded in the past few days amid enthusiasm about the end of the government shutdown.
It has now retested the important resistance level at $107,060, its lowest level in September, and the neckline of the double-top pattern. This means that it has done a break-and-retest pattern, a common bearish continuation sign.
The coin has also formed a death cross pattern as the 50-day and 200-day Weighted Moving Averages (WMA) have crossed each other. Also, the Average Directional Index (ADX) has stalled at 25, a sign that the trend is not all that strong.
Therefore, like on the weekly chart, there is a likelihood that the coin will continue moving downwards in the near term. If this happens, the next level to watch will be at $100,000. A move below that level will point to a crash to $96,790, the 38.2% retracement level.
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