Bearish view
- Sell the BTC/USD pair and set a take-profit at 76,400.
- Add a stop-loss at 86,000.
- Timeline: 1-2 days.
Bullish view
- Buy the BTC/USD pair and set a take-profit at 86,000.
- Add a stop-loss at 76,400.
The BTC/USD pair has come under pressure this week as the risk-off sentiment prevailed ahead of the Federal Reserve. Bitcoin dropped to $82,100, down from this week’s high of 84,300 and the year-to-date high of 109,312.
Bitcoin’s retreat coincided with the performance of the stock market. The Dow Jones Industrial Average (DJIA) dropped by over 240 points, while the tech-heavy Nasdaq 100 index fell by over 300 points. Also, the closely-watched VIX index rose by 6% to $21.78.
The crypto fear and greed index has remained in the fear zone, a sign that investors are staying in the sidelines. Historically, crypto prices underperform when there is a sense of fear in the market.
Bitcoin investors are hoping that the Federal Reserve will start to pivot now that recession risks have continued rising. A key concern about market participants is that Donald Trump’s tariffs will affect the economy and lead to a slowdown and high inflation.
A Fed pivot to lower interest rates would be a bullish catalyst for the crypto and stock market. Historically, these assets do well when the bank starts to embrace a more dovish tone. A good example of this is what happened during the Covid-19 pandemic in early 2020.
The BTC/USD pair retreated even as investors continued to buy spot BTC ETFs. Data shows that the spot ETFs have added over $350 million in assets this week. That is a sign that these investors anticipate that the coin will rebound.
BTC/USD technical analysis
The BTC/USD pair has come under pressure in the past few weeks. It has moved from the year-to-date high of 109,312 to the current 82,240. Recently, Bitcoin has failed to move above the resistance point at 85,000.
The BTC/USD pair has remained below the 50-day and 100-day moving averages. The two averages have formed a bearish crossover pattern, pointing to more downside. It has also formed a rounded top pattern.
The MACD and the Relative Strength Index (RSI) have pointed downwards. Therefore, the pair will likely drop to the next support point at 73,730, the highest point in March 2024. A move above the resistance point at 85,000 will invalidate the bearish outlook.
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