Bullish view
- Buy the BTC/USD pair and set a take-profit at 17,500.
- Add a stop-loss at 16,000.
- Timeline: 1 day.
Bearish view
- Set a sell-stop at 16,357 and a take-profit at 15,500.
- Add a stop-loss at 17,500.
The BTC/USD price remained in consolidation during the weekend as demand for digital coins remained tight. Bitcoin was trading at $16,520, where it has been in the past few days. It has crashed by more than 70% this year, giving it a market cap of over $317 billion.
Headwinds remain
The BTC/USD price has crashed this year for several reasons. First, like stocks and commodities, the coin has crashed because of the actions by the Federal Reserve. In a bid to fight soaring inflation, the Fed has delivered several rate hikes this year. It has added rates by 400 basis points and started implementing a quantitative tightening program.
Second, the pair has dropped because of the ongoing upheavals in the industry. In May, Terra, an ecosystem valued at over $40 billion collapsed. With it, investors lost billions of dollars and well-known brands like Voyager Digital and Three Arrows Capital went under.
The most recent crisis in the industry was the collapse of FTX and Alameda Research has led to concerns about the crypto industry. At its peak, FTX was the second most valuable brand in the crypto industry after Binance. As a result, there are concerns about contagion and regulation risks in the crypto industry.
The contagion following the collapse of FTX has already started. Last week, Digital Currency Group (DGC), the parent company of CoinDesk reported its exposure to FTX. This is notable since the company has billions in illiquid holdings in the crypto industry.
The outlook for Bitcoin this week will depend on more news about FTX. A likely catalyst will be the upcoming Dealbook Summit in New York, where Sam Bankman-Fried is a featured guest. His statements will likely have an impact on most coins. The BTC/USD price will also react to the upcoming American consumer confidence data.
BTC/USD forecast
The 4H chart shows that the BTC/USD price has been in a tight range in the past few weeks. It has remained at the 16,000 range as volume in the crypto industry dries up. The pair is consolidating at the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved to the neutral level of 50.
It has also found a strong support at 15,513, which was the lowest level this month. Therefore, Bitcoin will likely remain in this range on Monday as the consolidation continues. Any bullish move will be ripe for fading since sentiment remains weak.
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