Bullish view
- Buy the BTC/USD pair and set a take-profit at 36,000.
- Add a stop-loss at 33,500.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 34,000 and a take-profit at 33,000.
- Add a stop-loss at 36,000.
The BTC/USD pair continued consolidating on Wednesday morning as investors waited for the next catalyst in the crypto industry. Bitcoin was trading at 34,500, where it has been in the past few days. It remains slightly below last week’s high of 35,161 and has jumped by more than 38% from the lowest level in September.
Bitcoin waits for next catalyst
Bitcoin and other cryptocurrencies have been in a tight range in the past few days. This consolidation is likely because of profit-taking after the coins jumped sharply in October.
The coin rose after hopes emerged that the Securities and Exchange Commission (SEC) will approve a Bitcoin ETF in the coming weeks or months. A recent report showed that trading heavyweights like Jane Street, Jump Trading, and Virtu Finance will be supportive of Blackrock’s ETF.
Most analysts believe that the SEC will approve all ETFs by companies like Blackrock, Invesco, and Ark Invest at the same time. Also, they expect that an ETF will lead to more inflows to Bitcoin.
Bitcoin has also moved sideways after signs emerged that whales are still accumulating the coins. A report showed that the number of Bitcoin holders with at least $100k has risen to 23,400, the highest level this year.
At the same time, more retail traders are getting active in the market. According to Deutsche Bank analysts, activity by these traders rose to a high of 1.5 last week, the highest point this year.
The next important catalyst for the BTC/USD pair will be the upcoming Federal Reserve decision. Economists expect that the bank will decide to leave interest rates unchanged between 5.25% and 5.5%. In the past, the recent actions of the Fed have had no meaningful impact on Bitcoin.
BTC/USD technical analysis
The 4H chart shows that Bitcoin has moved sideways in the past few days. A closer look shows that it has formed a bullish pennant pattern, which is shown in black. In most periods, this pattern sends a sign that an asset will have a bullish breakout.
The pair has moved above the 50-period moving average and the Ichimoku Cloud indicator. At the same time, the Average Directional Index (ADX) has moved to the lowest level since October 16th. Therefore, the pair will likely have a bullish breakout in the coming days. The initial target for this move will be the YTD high of 35,160.
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