Bullish view
- Buy the BTC/USD pair and set a take-profit at 40,000.
- Add a stop-loss at 36,000.
- Timeline: 1-3 days.
Bearish view
- Set a sell-stop at 37,000 and a take-profit at 36,000.
- Add a stop-loss at 39,000.
Bitcoin price staged a strong comeback in the overnight session as demand for the coin continued. The BTC/USD pair rose to a high of 37,985, the highest point since April last year. It has soared by over 140% from the lowest point in December last year.
Hopes of a dovish Fed
Bitcoin continued its recent rally as investors reacted to the latest economic data from the United States. In a report on Tuesday, the US published encouraging inflation data. The data revealed that the headline inflation dropped from 3.7% in September to 3.2% in October.
The same report showed that the core CPI retreated from 4.2% in September to 4.0% in October. These numbers were weaker than what analysts were expecting. In addition, the Producer Price Index (PPI) continued falling in October.
The US also published weak jobs numbers. According to the Bureau of Labor Statistics (BLS), the economy created 150k jobs while the unemployment rate rose slightly to 3.9% in October.
These numbers mean that the Federal Reserve will likely pause rates between 5.25% and 5.50% in December. Historically, Bitcoin tends to do well when the Fed is either lowering rates or when it has signaled it will lower them.
Bitcoin also rose as investors waited for the potential approval of a spot Bitcoin ETF. Most analysts believe that the Securities and Exchange Commission (SEC) will approve ETFs filed by companies like Blackrock, Invesco, and Franklin Templeton.
Meanwhile, Cathie Wood, one of the most popular players in Wall Street, maintained her bullish view of Bitcoin. She maintains that Bitcoin is a digital gold and that its price will continue rising in the coming years. She expects that the coin will continue rising and hit over $600k in the coming years.
BTC/USD technical analysis
Bitcoin has been in a strong uptrend in the past few months. It has now moved above the 38.2% Fibonacci Retracement point on the daily chart. The BTC/USD pair has jumped over the important resistance level at 31,700, the highest point in July this year and June last year.
The BTC/USD pair sits above the 50-day and 200-day Exponential Moving Averages (EMA). In the long-term, the pair has formed an inverted head and shoulders pattern. Therefore, the outlook for the pair is bullish, with the next point to watc being at 40,000.
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