Bearish view
- Sell the BTC/USD pair and set a take-profit at 15,500.
- Add a stop-loss at 17,500.
- Timeline: 1-2 days.
Bullish view
- Set a buy-stop at 16,800 and a take-profit at 17,800.
- Add a stop-loss at 15,500.
The BTC/USD exchange rate continued to move sideways as investors capped one of the most disappointing years in cryptocurrencies. Bitcoin was trading at $16,600 on Thursday morning, which is significantly lower than where it started the year at.
A tough year for cryptocurrencies
Bitcoin and other cryptocurrencies suffered a major downfall in 2022. This meltdown was caused by two main factors. First, the macro environment changed dramatically after Russia invaded Ukraine. The invasion supercharged inflation, which pushed central banks to act.
Most banks, including the Federal Reserve and the European Central Bank (ECB), delivered several rate hikes during the year. This also explains why indices like the Dow Jones and Nasdaq 100 indices plunged by double-digits
Second, the BTC/USD price crashed after a number of spectacular collapses that happened during the year. FTX, the second-biggest exchange in the world, collapsed with an $8 billion funding hole. In May, Terra USD lost its peg, leading to over $40 billion in losses. Its collapse also led to the implosion of other firms like Three Arrows Capital, Celsius, and Voyager Digital.
As a result, the collapse of the BTC/USD pair has pushed many people to liquidate their holdings and leave the industry altogether. Others have moved their coins into self-custody. Exchanges like Coinbase and Binance have lost millions of customers and billions in assets in the past few weeks.
The crypto fear and greed index paints a gloomy picture of the industry. It has remained in the fear zone of below 30 in the past few weeks. This is a sign that investors are increasingly fearful of buying and holding coins.
There will be no catalyst for Bitcoin prices on Thursday. Therefore, performance will depend on the broader market sentiment. For example, BTC dropped on Wednesday as stocks dropped following China’s end of the Covid-zero strategy.
BTC/USD forecast
The 4H chart shows that the BTC/USD price has tilted lower in the past few days. It has dropped to the lowest level since December 19. The pair remains below the Ichimoku cloud and the important resistance point at 16,955. It has also dropped below the 25-day and 50-day moving averages and formed a head and shoulders pattern.
Therefore, the pair will likely remain in this range on Thursday. The next major move will be downward as sellers target the lowest point in 2022 at 15,600.
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