Bearish View
- Sell the BTC/USD pair and set a take-profit at 35,000.
- Add a stop-loss at about 38,500.
- Timeline: 1 day.
Bullish View
- Add a buy-stop at 38,000 and a take-profit at 39,000.
- Add a stop-loss at 37,000.
The BTC/USD pair attempted to crawl back after the sell-off experienced on Tuesday. The pair is trading at 37,626, which is a few points above this week’s low of 36,533.
Bitcoin Remains Under Pressure
The BTC/USD retreated as investors worried about a number of challenges. The biggest reason for the sell-off was the ongoing risks in Europe, where the possibility of a war rose this week. Already, Russia has deployed its military personnel in some parts of Ukraine.
In theory, risks to Ukraine should be positive for Bitcoin. For one, Western countries have targeted Russian banks in their sanctions package. Therefore, Bitcoin, which is a decentralized currency would help people handle foreign transactions. While formal exchanges will find it hard to deal with Russians, decentralized exchanges don’t face these challenges.
However, Bitcoin has declined because of the overall performance of American stocks. For example, on Tuesday, major indices like the Dow Jones and Nasdaq 100 declined by more than 1%.
Bitcoin is also facing some on-chain challenges. Data compiled by Glassnode shows that the overall demand for Bitcoin has faded in the past few days as investors remain worried about Ukraine and the Federal Reserve. Worse, over 4.7 million Bitcoins held by investors are currently at a loss. That includes those owned by large companies like MicroStrategy and Tesla.
There are other challenges that Bitcoin is facing. For example, the number of people actively trading cryptocurrencies has dropped sharply in the past few months. This is evidenced by the relatively weak financial results of companies like PayPal, Block, and Robinhood. Additionally, the stimulus package that helped to supercharge the industry last year is fading. Therefore, bulls have a lot of work to do in the coming months.
BTC/USD Forecast
The BTC/USD pair has been in a strong bearish trend in the past few months. The pair managed to test the key support level at 36,427 on Tuesday. That was the lowest it has been since February 3rd. Therefore, it is clear that Bitcoin struggled to move above the key resistance level at about 45,000.
It remains below the 25-day and 50-day moving averages while the Money Flow Index (MFI) moved has moved upwards. Therefore, there is a likelihood that the pair will continue its downward trend in the near term as bears target the key support at 35,000.
