Bullish view
- Buy the BTC/USD pair and set a take-profit at 64,000.
- Add a stop-loss at 58,000.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 59,000 and a take-profit at 57,000.
- Add a stop-loss at 62,000.
Bitcoin suffered a harsh reversal this week after finding a strong resistance at $66,000 last week. The BTC/USD pair pulled back to 60,500, its lowest point in over two weeks as geopolitcal risks rose.
Top Forex Brokers
Fed and Geopolitics
Bitcoin had a strong performance last week after the Federal Reserve slashed interest rates by 0.50% and as Beijing announced a big stimulus to boost the economy.
Its rally coincided with that of global stocks. US indices like the Dow Jones and the S&P 500 rose to a record high while Chinese indices had the biggest weekly increase in over two years.
This week, however, market conditions have changed. On Monday, Jerome Powell warned that the Fed will not cut rates as fast as what analysts were expecting. Instead, it will embrace a gradual approach to prevent stimulating inflation again.
The biggest catalyst for stocks and Bitcoin is the ongoing crisis in the Middle East. Israel has continued its battle with Hezbollah, while there is a big risk that Israel may risk an all-out war with Iran.
In a statement, Benjamin Netanyahu warned that Israel would mount a big response to Tuesday’s attack. Such a major war in the region will likely push inflation higher and pressure central banks to slow their rate cuts. Bitcoin often does well when the Fed and other central banks are dovish.
BTC/USD technical analysis
The BTC/USD pair suffered a harsh reversal after rising to over 66,000 last week. This was an important price since it coincided with the descending trendline that connects the highest swings since March this year. That is a sign that bulls struggled to move above that level.
On the positive side, Bitcoin has held steady above the 200-day Exponential Moving Average (EMA). It has also avoided forming the dangerous death cross pattern when the 200 and 50 moving averages cross each other. The MACD and the Commodity Channel Index have also continued falling.
Therefore, while the outlook is bearish, a rebound is also possible now that it has moved to the important psychological level at 60,000. A clear breakout will be confirmed if it rises above the descending trendline.
Ready to trade our free daily Forex trading signals? We’ve shortlisted the best MT4 crypto brokers in the industry for you.