Bullish view
- Buy the BTC/USD pair and set a take-profit at 18,000.
- Add a stop-loss at 16,000.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 16,700 and a take-profit at 15,500.
- Add a stop-loss at 17,500.
The BTC/USD price zoomed past an important resistance level after the latest statement by the Fed chair. It rose to a high of 17,160, which was the highest level since November 14. It has jumped by almost 10% from the lowest level in November.
Risk-on sentiment
The BTC/USD price bounced back as investors embraced a risk-on sentiment following Jerome Powell’s first speech in weeks. In it, the Fed chair welcomed the recent trends in inflation but warned that it will be too early to declare victory.
At the same time, he warned that it was too early to declare victory on inflation. As such, he reiterated that the bank will continue hiking interest rates in the near term albeit at a slower pace. Analysts are now pricing in a 0.50% rate hike in December followed by several 0.25% increases in the first quarter of the year.
Risk assets rose after the statement. Stocks rallied, with the Dow Jones adding over 600 points and the S&P 500 and Nasdaq 100 adding over 3%. The VIX index, which is a good measure of volatility, dropped by over 6%. At the same time, other cryptocurrencies like Ether, XRP, and Solana also rebounded. The Bitcoin fear and greed index rose to 30.
Meanwhile, bond yields continued their pullback. The 10-year bond yields declined by more than 1% to 3.68% while the 30-year and 2-year fell to 3.7% and 4.3%, respectively. With the yield curve still inverted, some analysts expect that the bank will start cutting rates in the third or fourth quarter of 2023.
The BTC/USD pair rose ahead of the first hearings of the collapse of FTX in the US Senate. These hearings are meant to identify the challenges that went on and find some recommendations as the government attempts to regulate the sector.
BTC/USD forecast
The BTC/USD pair rose to a high of 17,160 in the overnight session. As it rose, it moved above the descending trendline shown in yellow. It also rose above the 25-day moving average while the Stochastic Oscillator moved above the overbought level. The pair rose above the neckline of the inverted head and shoulders pattern.
Therefore, the pair will likely continue rising as buyers target the next psychological level of 18,000. The stop-loss for this trade will be at 16,600.
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