Bearish view
- Sell the BTC/USD pair and set a take-profit at 24,000.
- Add a stop-loss at 27,200.
- Timeline: 1-2 days.
Bullish view
- Set a buy-stop at 26,450 and a take-profit at 27,500.
- Add a stop-loss at 25,000.
The BTC/USD price remained under intense pressure during the weekend as regulatory concerns remained among traders and investors. It retreated to a low of 25,320, the lowest level since March 17th of this year.
Crypto and stocks diverge
The close correlation that has long existed between cryptocurrencies and stocks has faded in the past few weeks. A closer look shows that key American indices like the S&P 500 and the Nasdaq 100 have all moved to a bull market, meaning they have jumped by over 20% from their lowest levels this year.
Bitcoin and other altcoins, on the other hand, have underperformed in the past few weeks. This underperformance accelerated last week after the Securities and Exchange Commission (SEC) intensified its fight against digital currencies. On Monday last week, it unveiled a major lawsuit against Binance, the biggest company in the industry.
Some of the allegations were that the company was offering unregulated exchange in the US and commingled customer funds with its own. On the following day, the regulator sued Coinbase, the biggest crypto exchange in the country.
Since then, investors have rushed out of the crypto industry, with some of the biggest exchanges seeing billions of dollars in outflows.
Looking ahead, focus among traders will be on these regulatory issues. The other key catalysts to watch this week will be the upcoming interest rate decision by the Federal Reserve that is scheduled for Wednesday. Analysts believe that the bank will decide to leave rates unchanged after having hiked in the past 10 meetings.
Before that, the US will publish the latest consumer price index (CPI) data. Economists expect the data to show that the headline CPI dropped to 4.1% in May, a sign that the Fed’s actions are working.
BTC/USD technical analysis
The BTC/USD pair has been in a downward trend after peaking at about 31,000 in April. Since then, the pair has dropped by over 16%, signaling that it has moved to a correction. The pair has crossed the 50-day and 100-day exponential moving averages (EMA).
In the same period, the MACD has moved below the neutral point. Bitcoin has found strong support at its highest point on April 16th. Therefore, the outlook of the pair is bearish as concerns about regulations continue. More downsides will be confirmed if the pair moves below the key support at 25,320. If this happens, the next level to watch will be at 24,000.
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