Bearish View
- Sell the BTC/USD pair and set a take-profit at 35,000.
- Add a stop-loss at 43,000.
- Timeline: 1-3 days.
Bullish View
- Set a buy-stop at 41,000 and a take-profit at 45,700.
- Add a stop-loss at 38,000.
The BTC/USD pair remained in the tight range it has been in the past few weeks. The pair is trading at 39,000, which is slightly below last week’s high of 45,700. This price is significantly lower than the all-time high of almost 70,000.
Bitcoin Consolidation Continues
Bitcoin has been affected by several key factors in the past few weeks. First, there is the idea of the Federal Reserve and the ever evolving situation in the US. Data published last week showed that the American inflation continued surging in February. The headline consumer price index rose to 7.9% from the previous 7.5%.
Excluding the volatile food and energy prices, core CPI rose to about 6.4% in February. These were the highest numbers recorded in more than 40 years. Sadly, the situation will continue worsening in the coming months because of the ongoing crisis in Europe.
In the past few days, we have seen the prices of most items like copper, iron ore, coal, and crude oil surge. Also, shipping companies like Maersk and Mediterranean have all hiked their shipping costs while the price of flights has risen. Therefore, there is a likelihood that the Federal Reserve will be a bit hawkish when it holds its meeting later this week.
The other key catalyst for the BTC/USD pair is regulations. Last week, Joe Biden signed an executive order that will form a basis about regulations. He asked the top regulators in the US to come up with recommendations on how to improve the industry. The concern is that many sanctioned individuals in Russia will turn to digital currencies to avoid them.
Still, many watchers believe that these regulations are necessary to bring more adoption from institutional investors.
BTC/USD Forecast
The daily chart shows that the BTC/USD pair formed a double-top pattern at 45,634 this month. In price action analysis, this pattern is usually a bearish sign. It is now between the double-top level and the chin of the pattern. At the same time, the price is slightly below the 25-day and 50-day moving averages and is slightly above the 78.6% Fibonacci retracement level.
Therefore, there is a likelihood that the pair will have a bearish breakout this week as traders wait for the statement by the Federal Reserve. If this happens, the key level to watch will be at 35,000.
