Bearish View
- Sell the BTC/USD pair and add a take-profit at 40,000.
- Add a stop-loss at 47,450.
- Timeline: 1-2 days.
Bullish View
- Set a buy stop at 47,453 and a take-profit at 49,000.
- Add a stop loss at 44,000.
The BTC/USD price is hovering near its lowest level since February as concerns of high inflation remain. Bitcoin is trading at $44,865, which is 31% below its all-time high of $65,000.
Tesla and Bitcoin
Bitcoin prices have declined since last week when Elon Musk said that Tesla would stop accepting the cryptocurrency. This led to speculation that the company would also sell the Bitcoins it holds in its balance sheet. In a tweet yesterday, Musk hinted that the company had either sold or was considering selling the currency. He later clarified that the company had not sold its holdings.
Tesla is an important player in the Bitcoin industry because of its high-profile nature. The company has conquered the automobile business and has become the biggest manufacturer. This has seen its market cap soar to more than $600 billion, which is bigger than that of other automakers combined. Therefore, its decision to accept and invest in Bitcoin was seen as a sign of adoption.
However, Bitcoin has faced the challenge of the amount of energy used in its mining. In his tweet last week, Musk said that the use of fossil fuels in mining had contributed to the reversal. Other big companies have likely stopped investing in the currency, fearing that this will not endear them to environment, social and governance (ESG) investors.
The BTC/USD pair is also struggling as investors react to the rising fears of high inflation leading to high-interest rates in the United States. Last week, data showed that the overall Consumer Price Index (CPI) rose by 4.2% in April while the PPI rose by 6.2%. Therefore, there is a possibility that the Fed will start to gradually hike. Still, in an interview with CNBC yesterday, Atlanta Fed’s Raphael Bostic said that the Fed would hold steady to support the recovery.
BTC/USD Price Forecast
The BTC/USD price has been in a downward trend in the past few weeks. On the daily chart, the price has found a substantial resistance near the 60,000 level. Notably, it has moved below the key support level at 47,453, which was the lowest level on April 25. It has also dropped below the 50-day and 100-day moving average, signalling that bears are prevailing. The price is also hovering at the lowest level on February 28. Therefore, the pair may keep falling as bears target the next key support at 40,000.
