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Bearish view
- Sell the BTC/USD pair and set a take-profit at 25,000.
- Add a stop-loss at 27,000.
- Timeline: 1-2 days.
Bullish view
- Set a buy-stop at 26,400 and a take-profit at 27,500.
- Add a stop-loss at 25,000.
The BTC/USD pair is stuck in a tight range as the market waits for the next catalyst in the crypto industry. Bitcoin has remained at $26,000 after plunging hard on August 17th. It has slipped by almost 14% from the highest level this month.
Bitcoin ETF decision
Bitcoin has remained in a consolidation phase in the past few days as volume and volatility eased. Demand for BTC and most cryptocurrencies has been relatively weak as investors move to safer assets.
A key driver for this performance is the Federal Reserve, which has been hiking interest rates. It has raised rates from 0% during the pandemic to 5.50% and Jerome Powell hinted that it will continue raising rates in the coming meetings.
These rates have pushed rates on safe assets like money market funds and certificates for deposits (CDs) higher. These investments are providing more than 5% returns, which come with relatively low taxes. This explains why the US dollar index (DXY) has risen to the highest level in months.
The next important event that could move Bitcoin will be the decision by the Securities and Exchange Commission (SEC) on a spot Bitcoin ETF. The decision for some of the top applicants will happen by Friday.
Experts expect that the agency will either approve, deny, or delay the ETF. An approval will likely lead to more demand for the coin and vice versa. An ETF lawsuit brought by Grayscale against the SEC will also be in focus in the coming weeks.
The BTC/USD pair will react to several important economic data. On Tuesday, the Conference Board will publish the latest consumer confidence data. The other important data to watch this week will be the latest non-farm payrolls (NFP) and PCE numbers.
BTC/USD technical analysis
The BTC/USD price has been in a tight range in the past few days. It has formed a bearish pennant, which is shown in black. The pair is stuck at the 25-period moving average and is below the 50-period MA. It is also trading at the standard pivot point while the MACD is at the neutral point.
Therefore, the pair will likely have a bearish breakout in the coming days as sellers target the key support at 25,000. The stop-loss of this trade will be at 27,000.
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