Bullish View
Buy the BTC/USD after the dovish Fed decision.
Set a take-profit at the all-time high at 61,788 and another buy stop at 61,900.
Add a stop loss at 56,000.
Bearish View
Set a sell-stop at 56,000 and a take-profit at 54,000.
Add a stop loss at 58,000.
The BTC/USD continued its rebound after the Federal Reserve committed to continuing its easy money policy for a while even as the economy rebounds. The Bitcoin price rose to $59,670, which is 11% above its lowest level on Tuesday.
Bitcoin Eyes its All-Time High
The recent rally of Bitcoin has been attributed to the easy money policies implemented by the Federal Reserve and the US government. In its response to the pandemic, the Fed has lowered interest rates and launched its most ambitious quantitative easing (QE) program. This has seen its balance sheet rise to more than $7 trillion.
Similarly, the government has unveiled a stimulus package worth more than $5.9 trillion. The most recent one was passed just a week ago and the Treasury Department is currently distributing the funds.
In its dovish rate decision yesterday, the Fed predicted that the economy would continue rebounding this year as the number of infections falls. The recent stimulus will also help. Nonetheless, the bank committed to continue leaving interest rate and QE unchanged even as the Treasury yields rise. This is a positive thing for the Bitcoin price.
The BTC/USD is also rising as investors assess the potential ban of cryptocurrencies in India. A report by Reuters this week confirmed that government sources were determined to ban the mining, transaction, and even possession of all digital currencies except those issued by the central bank. Holders will be given six months to liquidate their cryptocurrencies.
While this will be a big deal, its impacts will be relatively limited, since Indians own less than $2 billion in cryptocurrencies. This is a relatively small figure considering that digital currencies are worth more than $1.6 trillion.
BTC/USD Technical Forecast
In February, Bitcoin soared to $58,332 and then declined by more than 25% to $43,000. This month, the Bitcoin price rose from $43,000 and tested a new all-time high at $61,800. It then erased some of those gains and declined by 13% to $53,270. Today, it is a few points below the all-time high.
The BTC/USD is above the 25-day and 50-day exponential moving averages (EMA) and the ascending black trendline that connects the lowest levels since February. The Relative Strength Index (RSI) has risen from 40 and is eying the overbought level of 70. Therefore, there is a likelihood that the cryptocurrency’s price will keep rising as bulls attempt to clear the all-time high at $62,000.
