Bearish view
- Sell the BTC/USD pair and add a take-profit at 21,305 (38.2% Fib).
- Add a stop-loss at 23,400.
- Timeline: 1 day.
Bullish view
- Set a buy-stop at 22,980 and a take-profit at 23,500.
- Add a stop-loss at 21,000.
Bitcoin and American stocks pulled back amid concerns about the state of the economy and monetary policy. The BTC/USD price dropped to 22,572, the lowest level since January 25. It has fallen by about 8% from its lowest point in 2023. At the same time, indices like the Dow Jones and Nasdaq 100 have also dropped by over 1%.
Bitcoin’s bullish momentum experienced in the first few days of the year has faded. This performance is mostly because of the ongoing fears among investors about the Fed. While last week’s 0.25% rate increase was welcome, the strong jobs numbers pushed analysts to assess their Fed outlooks.
In several statements this week, officials, including Jerome Powell, Neel, Kashkari, and Raphael Bostic warned that the tight labor market will make the fight against inflation more difficult. The unemployment rate dropped to 3.4% while the economy added over 500k jobs. However, the outlook of the white-collar job market worsened overnight as Disndy and Affirm announced mass layoffs. Disney will shed over 7,500 jobs.
BTC/USD analysis daily chart
The BTC/USD price has pulled back after soaring to the year-to-date high of 24,205 (September 12 high). It is now approaching the important support point at 21,600, the highest level on November 4. This decline could be part of the break-and-retest pattern, which is usually a sign of a bullish continuation.
Meanwhile, the price is slightly above the 50-day and 200-day exponential moving averages (EMA). The two averages are about to make a crossover, which is known as a golden cross. Therefore, the short-term outlook of Bitcoin price is bearish, with the next key level to watch being at 21,600. The bearish view will be canceled if the price moves above the year-to-date high of 24,202.
Bitcoin price 4H analysis
The BTC/USD pair has dropped modestly in the past few days. On the 4H chart, it has formed what looks like the head and shoulders pattern whose neckline is at 22,312. This pattern is usually a bearish sign. It has crossed the 50-period moving average and is at the 23.6% Fibonacci Retracement level. Also, the Relative Strength Index (RSI) has moved close to the oversold level of 30.
Therefore, Bitcoin will continue falling in the near term. More downside will be confirmed if it manages to move below 22,312. If this happens, the next level to watch will be at 21,305 (38.2% Fibonacci retracement level).
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