In the near term, the pair will likely remain under pressure as many retail traders take profit.
Set a sell-stop at 50,000 and a take-profit at yesterday’s low at 47,475.
Add a stop loss at 55,000.
Timeline: 1-2 days
Set a buy stop at 55,000 and a take-profit at 57,000.
Add a stop-loss at 53,000
The BTC/USD price retreated after surging to an all-time high of $58,341 during the weekend. The Bitcoin price dropped by almost 20% to $47,475 and then pared back some of those losses to the current $50,950.
Bitcoin Price Erases Some Gains
The BTC/USD price declined as many retail traders rushed to take profit after it rose to an all-time high of $58,340. Before the drop, the currency was up by more than 110%. According to data compiled by Investing.com, the currency is worth more than $962 billion.
In the past, the pair has gone through such pullbacks. For example, in January, the currency dropped by 31% when it reached the then all-time high of almost $42,000.
Notably, the BTC/USD price declined after Elon Musk warned that the price of Bitcoin and Ether were relatively higher. As the world’s richest man, Musk is seen as an influential person in the crypto industry. He is widely credited for making Dogecoin popular and valuable.
The price also declined as investors fear of rising interest rates in the United States. Economists believe that the overall consumer inflation will rise to about 2% later this year if Congress passes the upcoming $1.9 trillion stimulus package. This is evidenced by the recent Treasury yields rally.
While the stimulus will be positive for Bitcoin in the near term, the monetary policy shift by the Federal Reserve could have a negative impact on the price in the longer term. That’s because it will lead to an overall shift of monetary policy, with high-interest rates and no quantitative easing. Many analysts attribute the recent rally to the actions by the Federal Reserve.
Bitcoin Price Technical Outlook
The four-hour chart shows that the BTC/USD soared to an all-time high of 58,340 and then pulled back to a low of 47,475. As it dropped, it moved below the important green ascending trendline. Still, it remains above the important support at 41,283, which was the previous all-time high. In the near term, the pair will likely remain under pressure as many retail traders take profit. However, there is also a probability of the price bouncing back as investors buy the dips.