Bitcoin Holds $76K as Fed Rate Hike Risks Bearish Breakout
Bitcoin held the $76,000 support level after a weak weekly close below $77,000, while early Monday trading showed signs of a short-term recovery. On the four-hour chart, Bitcoin bounced from the lower boundary of a parallel channel and broke above a descending trendline. The move could target $78,900 and then $79,500, although a retest of the trendline or $77,000 remains possible.
The daily chart presents a more uncertain outlook. A potential head-and-shoulders pattern may be forming, with a downside break potentially sending Bitcoin towards its 200-day simple moving average. The weekly chart also shows several bearish signals: Bitcoin has yet to establish a new higher high, a recent shooting-star candle remains a warning sign, and the Stochastic RSI is turning lower.
Market attention is focused on Wednesday’s Federal Open Market Committee meeting. The CME Group FedWatch Tool reportedly showed an 88.5% probability of a 25-basis-point rate hike. Higher interest rates could pressure risk assets, including Bitcoin, and potentially break its ongoing sideways consolidation to the downside. Traders should monitor $76,000 and $77,000 as key support levels, with $78,900 and $79,500 acting as near-term resistance and targets.
Bearish
The immediate market bias is bearish because the article combines weakening weekly momentum with a potentially restrictive Federal Reserve catalyst. Bitcoin has not yet produced a new higher high, the recent shooting-star candle signals possible rejection near the top of the rally, and the Stochastic RSI is turning lower. A confirmed head-and-shoulders breakdown could increase selling pressure, particularly if price loses the $76,000 support zone. The 200-day simple moving average would then become an important downside reference.
Short term, a 25-basis-point rate hike could strengthen the US dollar and reduce demand for risk assets, potentially pushing Bitcoin below its consolidation range. Similar hawkish policy surprises and rate repricing events have historically triggered volatility and rapid liquidations in leveraged crypto positions. However, the four-hour breakout remains a counter-signal. Sustained trading above $77,000, followed by a move through $78,900 and $79,500, would weaken the bearish setup and suggest that the breakout is continuing.
Longer term, a successful retest of the 200-day moving average as support could restore confidence in Bitcoin’s broader uptrend. Conversely, a decisive weekly close below the key support region would raise the risk of a deeper correction. Traders should therefore watch Fed guidance, Treasury yields, the dollar, spot volume and derivatives funding alongside the stated technical levels.