Bullish View
- Buy the BTC/USD pair and set a take-profit at 110,000.
- Add a stop-loss at 104,000.
- Timeline: 1-2 days.
Bearish View
- Set a sell-stop at 106,000 and a take-profit at 103,000.
- Add a stop-loss at 110,000.
The BTC/USD pair continued its strong rally, reaching an all-time high, as demand for Bitcoin surged. Bitcoin soared to over $108,000 for the first time, bringing the year-to-date high gains to almost 150%.
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Bitcoin Demand Continues Rising
The BTC/USD pair has been in a strong rally, helped by the strong demand from institutional investors. Data shows that spot Bitcoin ETFs continued to see strong inflows, a sign that demand remains strong. These funds have had cumulative inflows of over $36.2 billion.
Blackrock’s iShares Bitcoin Trust (IBIT) is still the biggest spot Bitcoin ETF with over $57 billion in net assets. It is followed by the Grayscale Bitcoin Trust, which has over $22.2 billion, and Fidelity’s FBTC, which has $22 billion.
This growth is happening at a time when Bitcoin’s supply is falling. Bitcoin balances in exchanges continued falling and are sitting near the lowest level in years. That is a sign that most Bitcoin holders don’t plan to sell their coins.
Looking ahead, the next important catalyst for the BTC/USD pair is the upcoming Federal Reserve interest rate decision, which will set the tone on what to expect next year. Most analysts expect that the Fed will cut rates by 0.25% and then maintain a hawkish tone.
The Fed is concerned that the labor market is not doing well as the unemployment rate rose to 4.2%. It is also concerned that inflation is not falling faster enough. Data released last week showed that the headline Consumer Price Index (CPI) rose to 2.7%, while the core CPI remained at 3.3%.
BTC/USD Technical Analysis
The daily chart shows that the BTC/USD pair has been in a strong uptrend in the past few months. It has remained above the 25-day and 50-day Volume Weighted Moving Averages (VWMA).
The pair has moved to the overshoot point of the Murrey Math Lines. Also, the Percentage Price Oscillator (PPO) and the Relative Strength Index (RSI) have formed a bearish divergence pattern. This is a pattern that happens when the RSI and PPO fall while the price is rising.
Therefore, the BTC/USD pair will likely continue rising to the key resistance point at 110,000. It will then retreat as some investors start to take profits. If it happens, it will likely drop to 100,000.
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