Bearish View
- Set a sell-stop at 37,500 and a take-profit at 34,000.
- Add a stop-loss at 39,000.
- Timeline: 1-2 days.
Bullish View
- Set a buy-stop at 39,000 and a take-profit at 40,000.
- Add a stop-loss at 37,000.
The BTC/USD price held steady during the weekend as investors attempted to buy the dip. The pair rose to a high of 38,750, which was the highest it has been in more than a week. Other altcoins like Ethereum, Ripple, and Binance Coin also bounced back, pushing the total market cap of all cryptocurrencies to over $1.8 billion.
Bitcoin Unease Recovery
Bitcoin has been under intense pressure in the past few months. During this period, the coin’s price has fallen by more than half as investors continue worrying about the Federal Reserve.
The main concern is that the Fed will embrace a significant hawkish tone in the coming months in a bid to curtail inflation.
Indeed, analysts expect that the Fed will implement between 3 and 5 rate hikes this year. If this happens, it will be the most rate hikes it has implemented since 2018 when it implemented 4 hikes.
There are also concerns about the size of the rate hikes. Previously, most analysts were expecting that the Fed will implement rate hikes in 0.25% increments. Now, there are concerns that the bank will implement rate hikes in 50 basis increments. Historically, the performance of risky assets like Bitcoin tend to underperform in a period of high interest rates.
The BTC/USD pair rebound also mirrors the performance of American equities. On Friday, the four main indices jumped by more than 1%. The Dow Jones, Nasdaq 100, S&P 500, and Russell 2000 rose by 1.65%, 3.13%, 2.43%, and 1.255, respectively. In the past few weeks, there have been a close correlation between Bitcoin and American equities.
BTC/USD Forecast
The BTC/USD pair bounced back during the weekend. The jump means that the pair has risen almost 16% from its lowest level in January.
On the four-hour chart, we see that the pair has managed to move slightly above the 25-day and 50-day moving averages. The stochastic oscillator has moved to the overbought level.
While these moves are positive, there is a major risk considering that the Bitcoin price has formed a rising wedge pattern. In price action analysis, a rising wedge pattern is usually a bearish sign.
Therefore, there is a likelihood that the strong bullish trend will be undone this week. If this happens, we can’t rule out a situation where the coin retests the support at 30,000.
