Yesterday Bitcoin entered a well-received rally that took the world’s first digital currency back above $20,000 for the first time since mid-September when it briefly moved above $20,000 helped along from hype surrounding the Ethereum merge.

Bitcoin’s volatility continues to fall as the price holds in the $19,000 range. After gapping down from just above 80 in July to around 25 in August the Bitcoin Historical Volatility Index (BITMEX), volatility continues to decline breaking below 20 last week. Today the volatility index hit its lowest point in over a year at 18.83.

In trading last night overseas, Bitcoin broke out above its descending triangle for the first time since June. BTC traded over its resistance trendline at around 11 PM ET, the same hour hitting the high for the week at $19,954. BTC held above the upper resistance trend line for almost 6 hours before moving back into the descending triangle.

In our last article, we discussed the flat bottom descending top in BTC, which defined resistance since the beginning of June. We noted that this upper resistance line was tested five times giving us an indication that this resistance has tracked the highs over the last five months. Today we have yet to witness BTC break out of this wedge pattern as we get closer to the ever-narrowing apex.

After a two-day rally that ended two weeks of stable prices Bitcoin failed to move above its descending resistance trendline. This descending top goes back to the hard fall BTC took on May 9th, 2022, giving up $4,000 on that day. Since that time, we have had five failed attempts at cracking this resistance line including yesterday’s try.

Last week the world’s second-largest cryptocurrency made history by becoming the first major cryptocurrency to effectively replace its consensus mechanism and while this is truly a landmark accomplishment for Ethereum developers, the hype surrounding the switch to proof-of-stake quickly dissipated.

Today Bitcoin resumed its descent remaining in the zone of $18,000 - $20,000. This price zone has been tested as support over ten times during the last four months, and each time Bitcoin has held this level. However, with the Fed anticipated to announce the 5th interest rate hike this year at the conclusion of the FOMC meeting tomorrow, will this level of support remain unbroken?

At 8:30 AM ET, the U.S. Bureau of Labor released the consumer price index for the month of August. The report showed that inflation was still greatly elevated at 8.3% for all items over the last 12 months.

Anyone reading this I assume is already well aware of What the upcoming Ethereum 2.0 is and doesn’t need me to explain the details. This upgrade or more accurately hard-fork of the Ethereum blockchain has been widely anticipated for years and its delay was the most critiqued aspect for some time.

Bitcoin is having a bad start to the month of August with $20,000 appearing to have flipped to resistance. Following the weekend and Labor Day which contained tight volume and little volatility, Tuesday’s trading was decisive and to the downside. As of 5 PM, ET Bitcoin is trading at a loss of nearly $800 or 4.4% for the day.