Bullish view
- Buy the BTC/USD pair and set a take-profit at 29,175.
- Add a stop-loss at 26,000.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 27,117 and a take-profit at 26,000.
- Add a stop-loss at 29,000.
Bitcoin continued consolidating as the recent sell-off lost steam. The BTC/USD pair was trading at 27,500, where it has been in the past few days. This price was ~10% below the highest point this month. Other cryptocurrencies like Ethereum and Ripple also remained under pressure.
BTC sell-off eases
The BTC/USD pair moved sideways as a somber mood engulfed the financial market after the relatively weak financial results. First Republic, UPS, and Verizon published weak results, signaling that the economy was slowing.
First Republic, a leading bank, said that it lost over $104 billion in deposits in the first quarter as the banking crisis continued. In a report, the company said that it will sell up to $100 billion in securities to boost its balance sheet. Therefore, there are risks that the bank could implode in the near term.
First Republic’s stock dropped by more than 25%, which explains why Bitcoin continued to consolidate even as equities fell. The Dow Jones, Nasdaq 100, and S&P 500 indices dropped by more than 0.50%. Bitcoin has emerged as a safe haven during the banking crisis.
Meanwhile, the US dollar index jumped by more than 50 basis points as the risk-off sentiment continued. This happened after the relatively strong housing numbers in the United States. Building permits dropped by 7.7% in March, better than the estimated -8.8%.
Meanwhile, new home sales rose by 9.8% in March after falling by 3.9% in the previous month. The house price index (HPI) rose by 4.0%, which was also better than the estimated 3.9%. Therefore, there is a likelihood that the Fed will maintain its hawkish tone. The US will publish the latest durable goods orders on Wednesday.
BTC/USD technical analysis
Bitcoin jumped to a high of $31,000 earlier this month as hopes of a Fed pivot increased. It has now dropped sharply as investors start taking profits. On the four-hour chart, the pair moved below the 23.6% Fibonacci Retracement level. It has also moved slightly below the 25-day and 50-day moving averages.
There are signs that the recent BTC/USD sell-off has capitulated since it has struggled to move below the key support level at 27,117. Therefore, there is a possibility that the pair will bounce back as buyers target the key resistance point at 29,175.
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