Bitcoin has remained under pressure this week as global trade tensions and Federal Reserve policies weigh on investor sentiment. The Crypto Fear and Greed Index has dropped to 35, signaling fear among traders. Meanwhile, Bitcoin ETF inflows have slowed, and futures open interest remains weak, reflecting cautious market behavior.

Trade War and Federal Reserve Policies Add Uncertainty

The ongoing U.S.-China trade tensions have intensified, with tariffs imposed on Chinese goods worth $450 billion. While tariffs on Canada and Mexico remain paused, concerns persist about their potential reinstatement. This uncertainty has dampened investor confidence across markets, including crypto.

Additionally, the Federal Reserve’s hawkish stance has further pressured Bitcoin. The Fed recently left interest rates unchanged and hinted at just two rate cuts this year. Historically, Bitcoin thrives under dovish monetary policies, making this development a short-term bearish factor.

Bitcoin’s Technical Setup Hints at a Massive Breakout

Despite these challenges, Bitcoin’s weekly chart reveals two rare bullish patterns: a Cup and Handle and a Bullish Flag. Both patterns suggest a long-term uptrend with significant price targets.

Cup and Handle Formation Targets $123K

The Cup and Handle pattern, formed between November 2021 and November 2023, is a classic bullish indicator. This setup consists of a rounded bottom (cup) followed by a consolidation phase (handle). The depth of the cup measures around 80%, implying a potential price surge to $123,000.

Bullish Flag Points to $166K

Bitcoin is also forming a Bullish Flag, characterized by a sharp rally (flagpole) followed by a consolidation phase (flag). The size of the flagpole suggests a 55% breakout, projecting Bitcoin’s price toward $166,000.

Bitcoin Rally Will Take Time

While these patterns are highly bullish, their formation on the weekly chart means the breakout could take time. The Cup and Handle pattern itself took three years to develop, indicating that Bitcoin’s surge to $166K may be a long-term play rather than an immediate move.

Despite short-term pressures from macroeconomic factors, Bitcoin’s technical structure signals a potential rally in the coming years. If these rare patterns hold, Bitcoin could be on track for a significant surge, eventually reaching $166,000. However, patience is key, as these breakouts often take time to materialize.