Bullish view
- Buy the BTC/USD pair and set a take-profit at 43,500.
- Add a stop-loss at 41,500.
- Timeline: 1-3 days.
Bearish view
- Sell the BTC/USD pair and set a sell-stop at 41,500.
- Add a stop-loss at 43,500.
Bitcoin and other risky assets remained on edge as a sense of fear spread in the financial market. The BTC/USD pair remained at 42,500 as traders waited for the next important news. It is still slightly above the post-ETF low of $38,500.
Risk-off sentiment
Traders have embraced a risk-on sentiment in the past few days after the Federal Reserve decision and strong nonfarm payrolls (NFP) data. The Fed, as was widely expected, decided to leave interest rates unchanged.
The only change was that the Fed sounded a bit hawkish as it pushed back against the rising expectations that it will start cutting interest rates in the coming months. Precisely, many analysts, including Bill Ackman, were expecting the bank to start cutting rates in its March meeting.
Jerome Powell and Raphael Bostic continued this tone in their recent statements. Powell pushed back against rate cuts in an interview with CBS while Raphael Bostic warned that conditions were not ripe to start cutting.
The implications of these statements was relatively swift as the US dollar index (DXY) jumped while global stocks plunged. In the United States, the Dow Jones and S&P 500 indices dropped by more than 1% on Monday. The VIX index rebounded while the fear and greed index retreated.
The Fed has impacts on the price of Bitcoin. For one, an extremely hawkish Fed pushes investors from risky assets to safe ones like short-term government bonds. On a positive note, Bitcoin has done well as the Fed has hiked interest rates in the past few months.
Bitcoin has also wavered as inflows in spot Bitcoin ETFs slow. The most recent data shows that inflows have grown marginally in the past few weeks. Some of the inflows have been rotations from the expensive Grayscale Bitcoin Trust (GBTC).
BTC/USD technical analysis
Turning to the 4H chart, we see that the BTC/USD pair has remained in a tight range in the past few days. As a result, the Average True Range (ATR), one of the best measures of inflation, has drifted downwards, signaling that there is no volatility. The Awesome Oscillator has been stuck at the neutral point.
Therefore, the outlook for the pair is where the status quo remains in the near term. This means that it will remain in this range, with the key levels to watch being the support at 41,845 and the resistance at 43,902.
Ready to trade our free Forex signals? Here are the best MT4 crypto brokers to choose from.