Bearish View
- Sell the BTC/USD pair and set a take-profit at 29,400.
- Add a stop-loss at 35,000.
- Timeline: 1-2 days.
Bullish View
- Set a buy-stop at 34,000 and a take-profit at 36,000.
- Add a stop-loss at 32,000.
The BTC/USD pair continued the downward trend in the evening session as investors continue to worry about the hawkish Federal Reserve and the rising regulatory issues. The pair dropped to a low of 33,000, which was the lowest level since July last year. It has collapsed by about 50% from its highest level in 2021.
Fed and Regulations
The BTC/USD pair decline coincided with the overall weakness of other assets. In the United States, the Dow Jones tumbled by over 800 points while the Nasdaq 100 declined by more than 500 points.
The Nasdaq 100 index declined by 140 points and effectively moved into a correction zone. Correction is a period when a financial asset collapses by about 10% from its highest point.
This decline happened as investors eyed the upcoming interest rate decision by the Federal Reserve. The bank, which will start its meeting today, is expected to continue tightening its monetary policy. It will likely reduce the size of its asset purchases for the third straight month.
The BTC/USD pair also declined because of the rising worries of regulations. In the past few weeks, several countries have announced plans to boost regulations in the industry. For example, last week, a European regulator argued that the region should ban Bitcoin and mining in the region. She argued that the bloc should advocate for a proof-of-stake mechanism.
On Thursday, the biggest news came from Russia, where the Bank of Russia advocated for a total and complete cryptocurrency ban. The bank based its argument on several factors. First, it argued that cryptocurrencies posed a big risk to the economy by promoting cybercrime.
Second, the bank argued that cryptocurrencies would pose a strong monetary risk. And finally, the bank warned that Bitcoin and other cryptocurrencies posed a climate risk.
BTC/USD Forecast
The BTC/USD pair maintained a bearish trend in the past few weeks as worries about monetary policy continued. It declined to a low of 33,000, which was the lowest level since July. On the daily chart, the pair formed a death cross, where the 200-day and 50-day moving averages made a crossover.
At the same time, the Relative Strength Index (RSI) has been in a downward trend. Therefore, the pair will likely continue falling as bears target the next key support at 29,400, which was the lowest level in July.
