Bullish view
- Buy the BTC/USD pair and set a take-profit at 100,000.
- Add a stop-loss at 91,000.
- Timeline: 1-2 days.
Bearish view
- Sell the BTC/USD pair and set a take-profit at 89,000.
- Add a stop-loss at 100,000.
Bitcoin price dropped to a crucial support level, as it continued forming mixed chart patterns during the recent downtrend. The BTC/USD pair fell to a low of $92,590, down by 15% from its highest level on record.
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Bitcoin’s retreat happened as some investors took profits as bond yields jumped to their highest level in almost 2 years. The 30-year yield moved to 4.95%, while the 10-year and 5-year moved to 4.7% and 4.46%, respectively.
These yields kept rising as investors remained concerned about the pace of Federal Reserve cuts this year. Analysts expect that this pace will be much slower than expected because of the stubbornly high inflation rate. The headline Consumer Price Index (CPI) has stalled above 2% in the past few months.
Minutes released on Thursday showed that most officials anticipate that the Fed will deliver at least two cuts this year.
On the positive side, there are signs that inventors are buying the recent dip. Spot Exchange Traded Funds (ETFs) had inflows for three consecutive days. They added $908 million in assets on Friday, $987 million on Monday, and $52 million on Tuesday, a sign that Wall Street is buying the dip. These ETFs now hold coins worth $110 billion, equivalent to 5.76% of the Bitcoin market cap.
BTC/USD Technical Analysis
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The daily chart shows that the BTC/USD pair has been in a tight range in the past few weeks as it remains in a price discovery phase. It has remained above the 50-day moving average, which has provided substantial support.
On the negative side, Bitcoin has formed a head and shoulders chart pattern, which is often a bearish reversal sign. The neckline of this pattern connects the lowest swings since November 26 last year.
However, there are signs that it has formed a bullish flag chart pattern with a long vertical line and a rectangle formation. It is one of the most positive signs in the financial market. On top of this, it has formed a small hammer pattern with a long shadow and a small body.
Therefore, there are signs that Bitcoin has bottomed as long as it remains above the 50-day moving average and the lower side of the flag. If this happens, it will rebound to the upper side of the channel, which is above 100,000. A drop below the support could see it fall to the 100-day MA at 87,235.
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