Bitcoin price corrects after hitting a wall on a multi-month descending trendline

"Up only" Bitcoin and Ethereum are taking a break after encountering resistance on a steep multi-month descending trendline.

Market Update

On August 15, the price of Bitcoin (BTC) and the broader market corrected, as the S&P 500 and DOW looked to build on four straight weeks of robust gains. Data from TradingView and CNBC shows the Dow Jones hit its 200-day moving average, a first since April 21 and perhaps a sign for bulls that the market has bottomed out.

Dow Jones Industrial Average Index (DJI). Source: TradingView

While stock markets have been surprisingly bullish in the face of high inflation and a steady schedule of interest rate hikes, a number of traders are concerned that the trend current 32-day bull run in the DOW and S&P 500 could be a bearish rally.

The release this week (August 17) of the Federal Open Markets Committee (FOMC) minutes should give more context to the Federal Reserve's current view of the health of the U.S. economy and may -be shed light on the size of the next interest rate hike.

Over the past month, overly optimistic crypto traders on Twitter have also touted a narrative that emphasizes selling Bitcoin, Ether (ETH), and altcoins ahead of FOMC meetings and then on the recovery if the rate set aligns with the figure expected by investors. .

Somehow this near-term momentum is also contributing to investors' belief that the Fed will "walk away" from its monetary policy of higher interest rates and quantitative tightening after the "inflation peaks". This can be a somewhat profitable trade for savvy day-traders, but it's important to note that inflation is currently at 8.5% and the Fed's target is 2%, which is a long way off. be the case.

Ultimately, the price of Bitcoin maintains a strong correlation with the S&P 500, so it would be wise for investors to avoid tunnel vision-type narratives that align with their bi...