Bullish view
- Buy the BTC/USD pair and set a take-profit at 53,000.
- Add a stop-loss at 50,000.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 51,000 and a take-profit at 50,000.
- Add a stop-loss at 53,000.
Bitcoin made some wild swings in the overnight session after it briefly tested the important resistance at $53,000. The BTC/USD pair then retreated to a low of 50,783, its lowest point since February 17th.
Risk-off sentiment
The BTC/USD pair remained in a highly volatile period as investors embraced a risk-off sentiment. This view was confirmed by the performance of the US dollar index (DXY), which retreated by over 0.25% to $103.93.
American equities also retreated, with the Dow Jones shedding about 100 points and the S&P 500 index falling by 45 points. The tech-heavy Nasdaq 100 index also continued falling as investors reflected on the ongoing earnings season.
US bond yields also remained at an elevated point. The 10-year bond yield rose to 4.25% while the 30-year jumped to 4.4%.
This price action is mostly because traders are focusing on the upcoming Federal Reserve minutes that will come out on Wednesday. These minutes will provide more information about the recent meeting and then provide hints on what to expect in next month’s meeting.
Bitcoin and other financial assets tend to react to the actions by the Federal Reserve because it is often seen as a risky asset. In most cases, it tends to do well when the Fed has embraced a dovish tone as it did in its December meeting.
The other notable catalyst for Bitcoin is that ETF inflows are still going on, with Blackrock’s and Fidelity’s funds having the biggest gains. These inflows are happening ahead of the upcoming Bitcoin halving event.
BTC/USD technical analysis
The BTC/USD has been in a tight range in the past few days. In this period, the pair has formed a bullish pennant pattern, which is a positive sign for a financial asset. The pair showed some volatility as it neared the confluence of this pennant pattern. Its lowest point was a notable level since it was also its lowest level on February 17th.
On the four-hour chart, the pair has remained above the 50-period moving average and the important support level at 50,000. Therefore, the outlook for the pair is still bullish, with the next point to watch being at this week’s high of 53,000. A break above that level will open the possibility of it rising to 55,000 in the near term.
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