The pair will likely continue rising today as bulls target the important resistance at $54,000.
Buy the BTC/USD and add a take-profit at 54,000.
Add a stop-loss at 44,000.
Place a sell-stop trade at 45,000 and a take-profit at 40,000.
Add a stop loss at 50,000.
The BTC/USD bounced back in the overnight session as investors rushed to buy the dips. Bitcoin price is at $50,973, which is 13% above yesterday’s low of $44,900.
Bitcoin Volatility Continues
Bitcoin, the world’s biggest digital currency, has had a difficult period in the past two days. After reaching an all-time high of $58,353 during the weekend, the price dropped by more than 23% and settled at a low of $44,900.
This happened as many investors started to take profit since the price has more than doubled this year. Also, the price declined as investors reacted to a relatively bearish call by Elon Musk, who said that the price had become extremely expensive.
In a statement yesterday, Treasury Secretary Janet Yellen criticized the currency as “an extremely inefficient way of conducting transactions. She also warned about its recent and historic volatility.
During her confirmation hearings, Yellen asked politicians in Washington to do more to curtail the currency. They could do this by placing a complete ban of the currency or putting more regulations. However, critics argue that adding such measures will make the currency more attractive to investors.
Meanwhile, the BTC/USD is also rising after Jerome Powell concluded his first day of testimony yesterday. This testimony came at a time when US yields are rising, pushing more people to fear about higher interest rates and more tightening by the bank.
However, in his statement, he said that the US economy is still going through an uneven recovery and that the current policies will remain. An easy money policy by the Fed is usually a positive thing for Bitcoin and other similar assets like gold and silver.
BTC/USD Technical Outlook
The four-hour chart shows that the BTC/USD dropped by more than 20% in the past few days. It formed a bullish engulfing pattern and has risen by more than 13% in the past few hours as traders buy the dips. The price remains slightly below the ascending trendline. It is also attempting to move above the 25-day and 15-day exponential moving averages.
Therefore, in my view, the pair will likely continue rising today as bulls target the important resistance at $54,000. However, a drop below the lowest level yesterday will mean that there are still sellers, who will be ready to push it to $40,000.