Bearish View
- Sell the BTC/USD and set a take-profit at 38,500.
- Add a stop-loss at 43,500.
- Timeline: 1-2 days.
Bullish View
- Set a buy-stop at 41,500 and a take-profit at 43,500.
- Add a stop-loss at 39,000.
The BTC/USD pair crashed hard during the American and Asian sessions as macro concerns continued. The pair declined to about 39,335, which was the lowest level since March 21st this year. It has fallen by more than 16% from its highest level in March.
Macro Concerns Remain
Bitcoin declined sharply on Monday, continuing a sell-off that started on March 28th when it rose to a high of $48,300. This sell-off has mirrored the performance of other assets, especially the Nasdaq 100 index. Indeed, the tech-heavy Nasdaq index has fallen by almost 9% from its highest point on March 29th.
Investors have been concerned about the bond market. In the past few days, investors have dumped bonds as worries about inflation rose. As a result, the yield of the 10-year and 30-year Treasuries rose to 2.77% and 2.82%.
The performance of the yield curve is mostly due to the actions of the Federal Reserve and the rising worries of inflation. The minutes published by the Federal Reserve showed that the bank will consider hiking interest rates and then start a gradual phase of quantitative tightening.
As a result, Bitcoin and other cryptocurrency prices have declined sharply. The Nasdaq 100 index has also fallen while the US dollar has gone parabolic. The next key mover for the BTC/USD pair will be the upcoming American inflation data scheduled for Tuesday.
Economists expect that these numbers will show that the American consumer inflation jumped sharply in March. Precisely, they see that inflation rose by a multi-decade high of 8.4% while core inflation rose to 6.6%.
Still, it is unlikely that the numbers will change the tone of the Federal Reserve. The bank is expected to continue hiking interest rates in May.
BTC/USD Forecast
The BTC/USD pair declined sharply in the overnight session. It moved to the lowest level since March 21st. It has moved below the 61.8% Fibonacci retracement level. As a result, it dropped below the short and long-term moving averages while the Stochastic Oscillator moved to the oversold level.
Therefore, the pair will likely keep falling as bears target the next key support level at 38,500. A move above 43,000 will invalidate the bearish trend.
