The Bitcoin price is still in a range from $83K up to $87K. Wednesday’s PCE inflation data is released later in the day. Could this change things for the $BTC price?

A hot or cool Core PCE print?

The PCE Price Index (Personal Consumption Expenditures) is what the Federal Reserve uses to measure inflation, hoping to see this figure come down to the Holy Grail of 2%. The index tracks the prices of U.S. household goods and services, with ‘Core PCE’ (excluding food and energy) the figure the Fed relies on most.

A hotter than expected Core PCE figure could lead to higher bond yields and a stronger dollar, while a cooler than expected print would likely spark a rally in stocks. Bitcoin bulls will be hoping for the latter outcome.

U.S. 10-year bond yields coming down

Source: TradingView

U.S. bond yields accelerated over the last week, with the 10-year yield hitting 5.293, thereby making a 19-year higher high in the process. It looks as though the 10-year yield may be on its way back down again now, with 5% a possible target, although the current volatile phase may not be over just yet. That said, if the support at 5.2% gives way, this could do wonders for stocks, gold, and the $BTC price.

$BTC price maintains narrow range

Source: TradingView

The 4-hour chart for $BTC illustrates that the price is maintaining within a smaller channel which it entered 9 days ago. After initially climbing to the top of this channel the price has since kept to the lower half, which has kept it in a narrow range for the last week.

Buffeted by the strong winds of rising bond yields over this time, the $BTC price has held firm - more so than has been the case for stocks and precious metals. The $82,840 horizontal support, also the bottom of the parallel channel, is very important here. If the bulls are going to continue their rally, this support floor has to hold.

A bearish descending triangle?

Source: TradingView

In the daily time frame it has to be acknowledged that the price action could be trading within a descending triangle. This would put the $BTC price into more of a bearish setup given that descending triangles break to the downside more often than not. Be that as it may, if the price does break to the upside, this will make the breakout even more bullish. 

The daily Stochastic RSI has its indicators passing the halfway point so it may only be a few more days before the indicators hit the bottom and start to make their way back up again, signalling upside price momentum as they pass back above the 20.00 level.

The RSI has its indicator still finally balanced. Falling through the descending trendline would likely signal a breakdown in price action, while bouncing higher from the trendline would probably signal a breakout.

A huge inverse head and shoulders pattern could play out if price collapses to $73K

Source: TradingView

The weekly chart for the $BTC price shows that there is absolutely nothing to worry about at all - as long as the horizontal support at $83K holds. The price coming back to test this level is perfectly normal and a bounce into next week could be the next move.

If we theorise that the $83K level does break down and the price corrects to the big support level at $73,600, this would likely form the right shoulder of a huge inverse head and shoulders pattern - a king of bottoming patterns. If this played out, the measured move could send the $BTC price up to $108K. Whichever way you look at it, this is the early stages of the bull market. It just requires patience.

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.