Bullish Case
Set a buy stop at 55,000 (median pitchfork level).
Add a take-profit at 58,320 (YTD high) and a stop-loss at 53,000.
Timeline: 1 -2 days.
Bearish Case
Set a sell-stop at 49,000 and a take-profit at 47,000.
Set a stop loss at 52,000.
The BTC/USD is hovering around the 50,000 mark as investors wait for the next big move. The price has risen by about 15% from last week’s low of $43,195.
Bitcoin Price Set to Rise?
After dropping by 26% last week, the price of Bitcoin has bounced back this week as investors rush to buy the dip. This price action is partly because the US Treasury yields have been relatively stable this week. The yield on the ten-year has dropped from last week’s high of almost 1.60% to 1.47% while the 30-year has dropped to 2.260%.
However, the next two days could be important. Yesterday, the ADP delivered relatively weak employment numbers that showed that the economy added 117K jobs in February. The numbers caused shivers as the yields started to rise. This situation will possibly get worse tomorrow if the Bureau of Labour Statistics (BLS) publishes weak employment numbers. If this happens, it will increase the possibility of the $1.9 trillion stimulus package passing.
In theory, this stimulus package will have mixed output to the BTC/USD price. For one, it should increase its value, since some of these funds will move to cryptocurrencies. However, it also means that the American economy will overheat, leading to higher interest rates. Bitcoin tends to underperform in a period of high rates. Later today, analysts will listen to a speech by Jerome Powell for clues on hikes.
Meanwhile, institutions are getting enthusiastic about the currency. In a recent report, analysts at Citi said that more companies are considering buying the currency. It also said that the currency would become the currency of choice for international trade.
BTC/USD Technical Analysis
The BTC/USD reached an all-time high of $58,320 almost two weeks ago. The price then dropped by more than 25% to $43,000 and is now trying to bounce back. It has moved above the 25-period and 15-period weighted moving averages.
Also, it has moved below the first support of the Andrews Pitchfork tool, meaning that the recovery is not yet complete. A closer look shows that it has formed an inverted head and shoulders (H&S) pattern. Therefore, while the pair will likely rebound, bulls need to wait for it to retest the median of the pitchfork above $55,000.
