Bullish view
- Buy the BTC/USD pair and set a take-profit at 65,000.
- Add a stop-loss at 61,500.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 63,000 and a take-profit at 60,000.
- Add a stop-loss at 65,000.
Bitcoin price continued its recovery on Tuesday as investors continued to buy the dip. The BTC/USD pair soared to a high of 63,783, its highest point since June 23rd and almost 10% from its lowest swing in June.
Why Bitcoin is rebounding
Bitcoin rebounded as investors embraced a risk-on sentiment in the market after the French election. This view was supported by the fact that American and European stocks continued rallying while the US dollar index (DXY) pulled back. Bitcoin does well when there is a risk-on sentiment in the market.
The BTC/USD pair also rallied as traders bought the dip following the big decline in June when the pair dropped by almost 20% from its highest point to the lowest level during the month. In most cases, Bitcoin tends to rebound after suffering a big drop.
Therefore, this rebound could also be a dead cat bounce, which is a situation where an asset that is falling stages a brief comeback. In the past few months, Bitcoin and other cryptocurrencies have had several dead cat bounces.
The case of a dead cat bounce is strengthened by the fact that Bitcoin ETFs have continued seeing outflows from investors. Most ETFs, including by the likes of Blackrock, Invesco, and Franklin Templeton have all reported outflows in the past three weeks.
At the same time, the German and American governments have started disposing of thousands of coins in their holdings, a move that has increased the amount of coins in exchanges like Binance and Coinbase.
Bitcoin price analysis
The 4H chart shows that the price of Bitcoin bottomed at $58,408 on June 24th and has rebounded to over 63,783, its highest point on June 23rd. It has moved inside the 50% and 38.2% Fibonacci Retracement point.
The pair has also moved above the 50-period and 25-period Exponential Moving Averages (EMA). At the same time, the Relative Strength Index (RSI) and the MACD have all pointed upwards.
The pair has also risen above the Ichimoku cloud indicator, meaning that bulls are in control. Therefore, Bitcoin could continue in the next few days as buyers target the psychological level of 65,000. A move above that level could then see it retest the 38.2% retracement point at 66,085. The alternative scenario is where the pair retreats and retests the support at 60,000.
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