Bearish view
- Sell the BTC/USD pair and set a take-profit at 53,420.
- Add a stop-loss at 60,000.
- Timeline: 1-2 days.
Bullish view
- Buy the BTC/USD pair and set a take-profit at 60,000.
- Add a stop-loss at 53,000.
Bitcoin price continued wavering as traders focused on the ongoing transactions by the German government and Mt.Gox and the next Federal Reserve actions. The BTC/USD pair was trading at 57,420 on Thursday, down by 21% from its highest level this year.
German government liquidations
Bitcoin has been in a strong bearish trend in the past few weeks as concerns about increased coins in exchanges. The German government, which holds about 50,000 coins from a collapsed piracy website, has started to move them in exchanges like Kraken and Coinbase.
Moving Bitcoins from wallets to exchanges is one of the most popular approaches of selling these coins. Mt.Gox, an exchange that collapsed in 2014, has also started to move its tokens to compensate customers.
Therefore, Bitcoin has dropped as buyers remain in the sideline as this supply continues increasing.
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Also, it has retreated as investors focus on the upcoming US election in which Biden is facing off with Donald Trump. There are concerns about whether Biden will run and who will replace him if he drops out of the race.
Donald Trump has endeared himself to the crypto industry and even received donations from the Winklevoss Twins and the founder of Kraken. He is seen as a more friendly candidate for the industry.
The BTC/USD pair has also dropped because of the fear that the Federal Reserve will maintain interest rates for longer.
Traders will get more data about this on Thursday when the US will publish the latest inflation data. Economists expect the data to show that the headline and core inflation figures remained above 3% in May.
A higher inflation figure will be bearish for Bitcoin because it will send a signal that the Fed wll hold rates higher for longer.
BTC/USD technical analysis
The BTC/USD pair has dropped sharply in the past few weeks as concerns about the crypto industry remained. After crashing to 53,425 on Friday last week, it has stabilized and moved above 56,551, the neckline of the double-top pattern.
The pair has remained below the 50-day moving average and formed a small rising wedge chart pattern. In most cases, this is one of the most bearish chart pattern in the market.
Therefore, the pair will likely have a bearish breakout in the next few days. If this happens, the next point to watch will be 53,425, its lowest point last week.
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