The strong rally we’ve seen in the past few weeks stalled recently despite strong US economic data and lower than expected US inflation figures. The main macro drivers for bitcoin are growth expectations and liquidity, which have been both positive since the April 9 bottom.
Looking ahead, we have the August 1 tariff deadline that might keep the markets more on the defensive, but it certainly wouldn’t be the first time that Trump postpones a deadline or tones down his threats. So, the probabilities are more skewed for positive outcomes.
Nevertheless, the path of least resistance should remain to the upside given the lack of bearish drivers. The risks ahead include another growth scare from tariffs or a more hawkish repricing in interest rates expectations.
On the 4 hour chart, we can see that we have a strong support zone around the $116,000 level where we got several rejections and we have also a major trendline for confluence. If we get a pullback into that zone, we can expect the buyers to step in with a defined risk below the support to position for a rally into a new all-time high. The sellers, on the other hand, will look for a break lower to extend the correction into the next trendline around the $110,000 level.
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This article was written by Giuseppe Dellamotta at investinglive.com.
