Bullish case
- Set a buy stop at 37,000, hoping to capture gains in case of a bullish breakout.
- Have a take-profit at 39,000 and a stop loss at ~35,000.
- Timeline: 1-2 weeks
Bearish case
- Set a sell stop at 33,272, the lowest level yesterday.
- Add a take-profit at 32,000 and a stop loss at 35,000
Bitcoin price is under pressure, a few weeks after it reached an all-time high of $41,975. The BTC/USD is trading at 34,730, which is 8.5% below this week’s high of 37,888. It is 17% lower than the all-time high. Other altcoins like ETH and LTC are also being pressured.
Bitcoin price searches for direction
The price of Bitcoin has wavered this week as some bullish traders take profit following a long and successful bull run. In total, the currency has risen by more than 50% this year, becoming one of the best-performing assets in the market. It has risen by more than 700% from its bottom in 2020.
This trend has been helped by the ultralow interest rates and the unprecedented quantitative easing policy implemented by the Federal Reserve. Also, it has done well due to the trillions of dollars worth of stimulus offered by congress. These policies, together with the risk-on sentiment in the market, have led to a relatively weaker US dollar.
The BTC/USD is also reacting to a statement by Janet Yellen, the incoming Treasury Secretary. In her testimony on Tuesday, she asked Congress to come up with measures to curtail the use of Bitcoin and cryptocurrencies. Like Christine Lagarde, she said that the currencies were used to fund illegal activities. Therefore, this means that the crypto industry could see more regulations in the next few years.
However, the Bitcoin price could be supported by the upcoming stimulus package. Biden has proposed $1.9 trillion in spending, with individuals receiving about $1,400. Some of this money will end up in the crypto market.
BTC/USD Technical Outlook
The BTC/USD is trading at 34,730, which is lower than the all-time high. On the four-hour chart, the price is also below the descending trendline that connects the highest swings in the past few weeks. It also seems to be forming a symmetrical triangle pattern. The price is slightly below the 15-day and 25-day exponential moving averages. Therefore, for today, I suspect that the pair will be in consolidation. The key support and resistance levels to watch will be 34,000 and 36,000.
