Bitcoin price forecast for the current week: Bitcoin bulls are looking for a break above the 50-day EMA.

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Bitcoin’s price has crept closer to the 2020 support level, with traders anticipating further gains if a breakout occurs.

A four-day winning streak has pushed Bitcoin (BTC) prices closer to the 50-day exponential moving average ($35,115) as resistance.

During the May 2021 sell-off, the wave that was instrumental in strengthening Bitcoin’s bullish bias throughout 2020 as support flipped to become a resistance. As a result, it prevented the cryptocurrency from repeatedly extending its upward rebound moves.

For example, Bitcoin’s mid-May drop from $56,900 to $30,000 prompted bulls to buy the dip. As a result, the cryptocurrency surged back above $40,000, only to find its bullish momentum dwindling near the 50-day EMA. As shown in the chart below, the scenario repeated several times after May’s retracement attempt.

Bitcoin’s 50-day EMA as resistance. Source: TradingView.com

Rekt Capital, a well-known cryptocurrency analyst, turned to a 2020 fractal to determine potential outcomes from the ongoing Bitcoin price action.

The trader pointed out that Bitcoin price tested the 50-day EMA as resistance in October of last year, when the BTC/USD pair was trading just under $10,000. However, after breaking the upward wave, BTC/USD eventually established a record high near $65,000.

Bitcoin 50-day EMA fractals. Source: Rekt Capital, TradingView.com

“This [was] when BTC formed an almost identical fractal of Bitcoin’s current price action,” the profile noted, hinting that the fractal might repeat as Bitcoin tests the same resistance level after nine months.

Current week

Bitcoin closed in to reclaim 50-day EMA after painting a rosy week.

The benchmark cryptocurrency was off to end the seven-day session up by more than 8%. A majority of its gains came after The B-Word conference that features a trio of Wall Street biggies— Tesla’s CEO Elon Musk, Twitter’s CEO Jack Dorsey, and Ark Invest’s founder Cathie Wood. The executives took turns to speak favorably about Bitcoin technology and shared their thoughts about the future.

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Musk, whose cryptocurrency comments are notorious for causing market volatility, revealed that his private rocket company SpaceX owns Bitcoin. He also stated that Tesla’s Bitcoin payment option would be reinstated once its miners switched to more renewable energy sources to power its blockchain.

Dollar, stocks and the Fed

Bitcoin also appeared to have capitalized on risk-on flows led by a choppy U.S. dollar index and a rising Wall Street.

Bitcoin versus leading Wall Street indexes and the Us dollar index. Source: TradingView.com

Next week appears to be jam-packed with high-profile data and policy announcements.

The Consumer Confidence Index for July will be released on Tuesday by the United States Conference Board. Furthermore, a preliminary Consumer Sentiment Index report from the University of Michigan shows a decrease in consumer sentiment. The report also expresses concern about a sharp rise in inflation.

Inflationary pressures have recently increased the dollar’s appeal among investors. Despite the cryptocurrency’s popular safe-haven narrative, this has dampened Bitcoin’s interim bullish outlook.

On Wednesday, the Federal Open Market Committee (FOMC) will announce its interest rate decision and issue its monetary policy statement.

In congressional testimony earlier this month, Federal Reserve Chairman Jerome Powell stated that the Fed is still far from tapering its $120 billion monthly bond-buying programme. He stated that a decision to reduce the Fed’s asset purchases would be made only if the labour market improved significantly.

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However, officials at the Federal Reserve Bank of the United States expect to discuss whether tapering could begin by the end of this year. In particular, a hawkish shift in Fed policy in June contributed to the decline in Bitcoin prices and the rise in the dollar. As a result, Bitcoin bulls should remain cautious about the outcome of the FOMC meeting.

On the other hand, if the Fed decides to put the tapering talk on hold, given the rising economic uncertainties caused by the fast-spreading Delta variant of the Covid-19, it could hurt the dollar’s appeal and, as a result, provide a small boost to Bitcoin.

On Thursday, the U.S.  Bureau of Economic Analysis will release its gross domestic product’s growth estimate for the second quarter. Economists expect it to improve to 7.9% year-over-year from 6.4%.

Finally, the US economy docket will feature the Personal Consumption Expenditures (PCE), the Fed’s preferred metric to measure inflation, on Friday; it is expected to rise 3.7% in July from 3.4% in June.

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