Bitcoin Price Forecast:
- Bitcoin dropped beneath $11,000 for the first time since August 5 after President Trump announced trade talks with China were back on the table
- BTCUSD has convincingly moved off the descending trendline from June highs, which could now see the digital asset look to rising support from May lows
- Check out the DailyFX Podcast with guest Tone Vays for Bitcoin and Libra predictions. Mr. Vays specializes in Bitcoin and blockchain and was a vice president at JP Morgan Chase in the aftermath of the 2008 financial crisis
Bitcoin Price Forecast: Coin May Retreat on US-China Trade War News
Bitcoin has been dealt a blow on Tuesday after President Trump announced the newest tranche of tariffs on China will be delayed, which threatens a key fundamental driver behind the cryptocurrency. Recent weakness in emerging market currencies like USDCNH and the Argentine Peso has helped to boost the digital asset and add to its remarkable year-to-date performance. With USDCNH suffering losses, BTCUSD has followed suit and could again look to technicals for near-term support.
Bitcoin Price Chart: Daily Time Frame (May – August) (Chart 1)
Chart created with TradingView
The onset of the most recent US-China trade war flareup on August 1 effectively rescued the coin from slipping beneath the ascending trendline from May. Its opposite, descending from June, was under fire amid the escalation, until Tuesday’s development. The fundamental forces have helped to keep BTCUSD within the rising wedge, which has now had both the upper and lower bounds tested. Without the benefit of a tailwind, Bitcoin prices may continue their journey lower from June highs in the weeks to come – assuming a relatively consistent fundamental landscape.
Bitcoin Price Chart: 4 – Hour Time Frame (May – August) (Chart 2)
Chart created with TradingView
That said, traders should be wary of other changes in the trade war landscape nonetheless as themes can shift drastically in a single tweet. Looking to the daily chart, Bitcoin is retreating beneath a confluence of resistance to the topside around 11,525 which will look to cap prices if fundamentals shift back into the coin’s favor. In the meantime, Bitcoin may continue to descend and threaten the ascending trendline from May – around $10,000 - without the backing of deteriorating EM FX. The pace of descent, however, may slow somewhat as Bitcoin approaches oversold territory and the 200-day moving average on the 4-hour chart.
--Written by Peter Hanks, Junior Analyst for DailyFX.com
Contact and follow Peter on Twitter @PeterHanksFX
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