Bullish View
Buy the BTC/USD and set a take-profit at 45,000.
Add a stop-loss at 42,000.
Timeline: 1-2 days.
Bearish View
Set a sell-stop at 42,500 and a take-profit at 40,000.
Add a stop-loss at 44,000.
The BTC/USD attempted to rebound in the evening session as investors focused on key macro issues affecting the world economy. Bitcoin is trading at $43,000, which is a few points above this week’s low of 40,000.
Bitcoin and Macro Issues
There are several macro issues that are affecting Bitcoin and other cryptocurrencies. First, American risks have risen as investors focus on the potential for a government shutdown and debt default. Democrats and Republicans in Congress have disagreed on key issues.
Still, there is a likelihood that Republicans will support a standalone bill to keep the government funded. The main challenge is on how to extend or suspend the debt ceiling. Republicans have said that they will reject a bill to expand the debt ceiling, meaning that there is a possibility that the government could default.
The BTC/USD has reacted to these issues for one key reason. In times of high risks, fear tends to be relatively high in the financial market. Indeed, the Fear and Greed Index has dropped to below 30. At the same time, investors tend to move to the safety of the US dollar. In fact, the US Dollar Index has risen to the highest level in several months.
At the same time, Bitcoin appears to have found a substantial support above the $40,000 level. Any time it has moved below this key level, investors have come back in and put it slightly above it. This is a positive sign.
Meanwhile, there are still more buyers in the market. On-chain data shows that the number of active Bitcoin users has been rising steadily. Similarly, the number of accounts with non-zero balances has risen while gas fees have remained steady. Indeed, some of the biggest holders of BTC like MicroStrategy have not yet exited their positions.
BTC/USD Forecast
The four-hour chart shows that the BTC/USD pair has been in a tight range recently. It is trading at 43,000, which is a few points above the key support at 40,697. It has struggled to move above this support several times before. It is also at the same level as the 25-period and 50-period moving averages. It is approaching the key resistance level shown in purple.
Therefore, the pair will likely keep rising as bulls target the key resistance at 45,000. A move below 42,000 will invalidate the bullish view.
