Bearish View
Sell the BTC/USD and set a take-profit at 45,000.
Add a stop-loss at 50,000.
Timeline: 2 days.
Bullish View
Set a buy-stop at 48,000 and a take-profit at 50,000.
Add a stop-loss a 46,000.
The BTC/USD pair is under pressure as investors reflect on the upcoming Federal Reserve decision and the ongoing sell-off of cryptocurrencies. The pair is trading at 47,482, which is about 32% below the highest level on record.
Bitcoin Remains Under Pressure
The BTC/USD pair has struggled in the past few weeks as the sell-off in the cryptocurrency industry goes on. Other cryptocurrencies like Bitcoin and Ripple have all slipped. As a result, the total market capitalization of cryptocurrencies has declined by more than $800 billion.
There are several catalysts for this weakness. From a technical perspective, this sell-off started when the price approached the psychological level of about 70,000. Historically, Bitcoin tends to have a major pullback when the price approaches such a level.
Second and most importantly, the sell-off is tied to the Federal Reserve. Two weeks ago, Jerome Powell said that the bank will change its view about inflation. In the previous meetings, the bank insisted that inflation was transitory and that it will return to its target level of about 2%.
However, due to the Omicron variant and the associated supply chain disruptions, the Fed chair said that the bank will abandon its view that inflation was transitory. He also hinted that the bank will embrace a more hawkish stand in the coming meeting.
This view was confirmed by the recent economic numbers from the US. Data published on Friday showed that inflation surged to the highest level in decades. Therefore, there is a likelihood that the Fed will continue tightening its policies in the near term.
The BTC/USD is falling even as the supply situation gets tight. Data compiled by Blockchain.com shows that about 90% of all Bitcoins that will ever exist have already been mined. This means that the coin will keep getting more rarer in the future.
BTC/USD Forecast
The four-hour chart shows that the BTC/USD pair has been under pressure lately. It is trading at 47,482, which is lower than last week’s high of more than 50,000. The pair has moved below the 25-day and 50-day moving averages. It has also moved to the first support of the standard pivot points. The MACD has also moved slightly below the neutral level.
Therefore, the pair will likely keep falling as bears target the key support level at 45,000. Later this week, it could bounce back as investors buy the news.
