Bitcoin (BTC) Trades Nervously Ahead of 'Sell the News' Event: Price Analysis

Despite only being 7. 3% below its all-time high the Bitcoin price is still trading sideways while the market has full knowledge of an incoming US rate cut on Wednesday.

Such good news for Bitcoin is perhaps tempered by nervousness that when the potential cut is announced, it will be treated by the market as a ‘sell the news’ event. Rate cut almost certain, but potential price manipulation will keep market guessing Only one day away, and the market is probably as certain as it can be that a rate cut will be announced by Federal Reserve Chairman Jerome Powell on Wednesday at the FOMC meeting.

The CME Group Fedwatch tool is currently showing a 96. 1% chance of a 25 basis points cut in interest rates, while there is a faint 3.

9% chance of a 50 basis points reduction. This is certainly good news for risk assets such as Bitcoin, and the US stock market is also likely to benefit.

That said, at times like this where a big price-changing event is announced, the market will often choose to go in the opposite direction. In this instance, an initial dip could result from the rate cut news release.

In addition, market makers could be tempted to use the increased price volatility around the announcement to spike the price up and down in order to liquidate both the long and short positions. $BTC breaks out of small descending channel/bull flag Source: TradingView The current correctional movement for the $BTC price has so far been very shallow.

Instead of a downward thrust, the price has generally moved sideways and only slightly downward, which could be taken as a fairly bullish period of price action. It can be observed that a channel within a channel has formed, and that the price has just broken out of this latest small-scale descending channel.

The price is currently coming back and is likely to test the top of the channel and also confirm the $115,700 horizontal level as support again before potentially going higher. It might be argued that this channel could in fact be a bull flag.

If it is, the measured move for the pole and flag would take the price up to around $120,000 - the last bit of resistance before the all-time high. Big challenge for $BTC ahead Source: TradingView The daily chart puts the resistance levels into perspective.

It can be seen that the $BTC price still has a challenge in front of it to pierce through this band of horizontal resistance. The 50-day SMA (blue line) is now acting as support, and depending on the price action over the next couple of days, it could start to angle upwards again.

At the bottom of the chart, the Stochastic RSI indicators either have a long way to go back to the bottom, or they will start to bounce along the top, perhaps like they did previously through the last part of June and until mid-July. Inverse head and shoulders pattern to take $BTC to $120,000?

Source: TradingView Zooming more into the same daily chart a real bonus pattern becomes clearer. This comes in the form of an inverse head and shoulders, which is a bullish formation.

The right shoulder broke through the neckline after completing the pattern, and the next daily candle confirmed it. A measured move for the pattern takes the price to … $120,000.

$117,500 is key resistance level Source: TradingView Finally, the weekly chart view reveals how important it is that the $117,500 resistance is overcome, if the bull market is to continue. One major signal in favour of the bulls is the cross-up of the indicators in the Stochastic RSI.

If this week closes in a bullish manner, these indicators will likely be signalling large upside price momentum that can take the $BTC price into the next stage of its bull run. Disclaimer: This article is provided for informational purposes only.

It is not offered or intended to be used as legal, tax, investment, financial, or other advice.