Bullish view
- Buy the BTC/USD pair and set a take-profit at 112,500.
- Add a stop-loss at 100,000.
- Timeline: 1-2 days.
Bearish view
- Sell the BTC/USD pair and set a take-profit at 100,000.
- Add a stop-loss at 112,500.
The BTC/USD pair has pulled back in the past few days as investors book profits following the strong surge between April and May. Bitcoin price dropped to a low of $104,245, down by 6.8% from its highest point this year.
Bitcoin price has wavered as investors book profits and as traders react to the ongoing trade issues. Scott Bessent, the Treasury Secretary, warned that the trade talks with the US were stalled. Trump also accused China of not living to the deal they made in Switzerland.
In a separate statement, he warned that the US would impose a 50% tariff on imported steel and aluminum. As such, there is a risk that the trade situation will get worse in the coming weeks.
Bitcoin also declined as spot ETFs recorded its first week of outflows since April. They shed over $157 million in assets, after adding $2.5 billion in the previous week. These funds had over $5.2 billion in inflows in May, up from $2.97 billion in the previous month.
Bitcoin has also seen its supply crash in the past few weeks. The total supply in centralized exchanges has dropped from over 3 million in 2020 to 1.3 million today, a 57% crash.
BTC/USD technical analysis
Bitcoin has been in a strong rally in the past few months, rising from a low of $74,240 in April to $111,900. It has formed remained above the major support/resistance level of the pivot point at 100,000.
Bitcoin has also remained above the 100-day moving average, a sign that bulls remain in control for now.
It has also formed a cup-and-handle pattern, a popular continuation sign in technical analysis. The ongoing decline is part of the formation of the handle section of this pattern.
Therefore, the pair will likely continue rising as bulls target the key resistance at 111,900. A move above that resistance will point to more gains, potentially to the psychological point at 115,000. A drop below the major S&R level will invalidate the bullish outlook.
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Crispus Nyaga is a financial analyst, coach, and trader with more than 8 years in the industry. He has worked for leading companies like ATFX, easyMarkets, and OctaFx. Further, he has published widely in platforms like SeekingAlpha, Investing Cube, Capital.com, and Invezz. In his free time, he likes watching golf and spending time with his wife and child.