Bullish View
Buy the BTC/USD and set a take-profit at 66,500.
Add a stop-loss at 60,000.
Timeline: 1-2 days.
Bearish View
Set a sell-stop at 61,000 and a take-profit at 59,000.
Add a stop-loss at 63,000.
The BTC/USD pair crawled back as investors remained optimistic about the rising demand for Bitcoin and other cryptocurrencies. Bitcoin is trading at $63,547, which is a few points below its all-time high of $66,900. It is also about 6.7% above the lowest level during the weekend.
Bitcoin Price Rebounds
The BTC/USD pair has been in a strong bullish trend recently helped by three key catalysts. First, the US Dollar Index has been in a sharp downward trend in the past few weeks. In most cases, the US dollar and Bitcoin have an inverse relationship.
Second, Bitcoin has rallied because the likelihood of tighter monetary policy has already been priced in. Most analysts expect that the Federal Reserve will start tapering its asset purchases in the coming weeks. While a tighter monetary policy is usually a bad thing for cryptocurrencies, its impact has already been priced in by market participants.
Meanwhile, the BTC/USD has risen as investors rush to its safety as inflation remains a major concern. In a recent tweet, Jack Dorsey, the CEO of Twitter noted that hyperinflation was a key concern for the market. Many investors rush to the safety of Bitcoin, which they see as an ideal hedge against inflation.
Third, Bitcoin has rallied because of the success of the new Bitcoin ETF. ProShares launched the Bitcoin Futures ETF (BITO) last week. Since then, the fund has attracted inflows of more than $1 billion. Also, more companies like GrayScale and Ark Invest have filed for their own ETFs.
However, some analysts believe that the Bitcoin futures ETF could have some challenges for the market since it tracks the futures market. In an article during the weekend, Barrons noted the significant divergence that happens between the price of oil and that of oil futures ETF.
BTC/USD Forecast
The BTC/USD pair has been in a relatively bullish momentum in the past few sessions. On the four-hour chart, the pair is attempting to test the all-time high of more than $66,000. It has also moved above the 25-day and 50-day moving averages (MA). Also, the Relative Strength Index (RSI) and MACD have also been rising.
Therefore, the pair will likely keep rising in the near term as bulls target the next key resistance level at 66,000. This view will be invalidated if the price moves below the weekend low at 59,550.
