Bullish view
- Buy the BTC/USD pair and set a take-profit at 64,000.
- Add a take-profit at 60,155.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 61,500 and a take-profit at 60,200.
- Add a stop-loss at 63,000.
Bitcoin price bounced back after crashing below the crucial support at $60,000 on Monday. The BTC/USD pair soared above 62,000 as investors continued to buy the dip ahead of the US PCE data.
Bitcoin bounces back
Bitcoin, the biggest cryptocurrency in the world, has been under intense pressure after peaking at $72,000 earlier this month.
It tumbled to a multi-week low of $58,400 on Monday as concerns about increased sales continued. Germany has dumped over 900 coins in the past few days while there are concerns that Mt.Gox coins will also enter the market soon. Germany is estimated to hold of 50,000 Bitcoins.
The BTC/USD pair has also been under pressure after the Federal Reserve delivered a hawkish statement earlier this month. While the Bank of Canada, European Central Bank (ECB), and the Swiss National Bank have slashed rates, the Fed has maintained a hawkish tone. It hinted that it will only deliver one rate cut this year only if interest rates continue falling.
The most important macro event this week will happen on Friday when the US will publish the latest Personal Consumption Expenditure (PCE) data. Economists expect the report to show that the PCE remained above 2% target in May.
Therefore, Bitcoin rose as investors bought the dip, hoping that it will continue to rebound and retest this month’s high of $72,000. The risk is that this could be a dead cat bounce, which happens after an asset crashes hard and then experiences a short-term comeback.
BTC/USD technical analysis
Bitcoin rose and formed a double-top pattern at 72,000 earlier this month. In most periods, this pattern is usually followed by a strong bearish breakout since it is one of the most popular reversal signs. This breakdown was confirmed when it dropped below the pattern’s neckline at 66,285.
The pair then collapsed to 58,500 on Monday and is now bouncing back. Still, it remains below the important resistance point at 65,000. It has also remained below the 50-period moving average while the Relative Strength Index (RSI) has drifted upwards. It also rose above the key point at 60,154, its lowest swing on May 10th.
Therefore, the pair will likely continue rising on Wednesday as buyers target the key resistance point at 64,000. The alternative scenario is where it resumes the downtrend and retests the psychological level at 60,000.
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