Bearish View
- Set a sell-stop at 32,700 and a take-profit at 30,000.
- Add a stop-loss at 34,000.
- Timeline: 1-2 days.
Bullish View
- Set a buy-stop at 33,500 and a take-profit at 35,000.
- Add a stop-loss at 32,000.
The BTC/USD pair is still in consolidation mode as investors wait for the next catalyst. The pair is trading at 33,120, which is about 4% below the highest level last week. It is also about 50% below its all-time high of almost 65,000.
Bitcoin Price in Consolidation
Bitcoin has struggled to find direction in the past few weeks as investors wait for the next catalyst. The pair will likely react modestly to the upcoming US inflation data scheduled for Tuesday. The numbers are expected to show that the headline Consumer Price Index rose by 4.9% in June, a small decline from the previous 5.0%. In the same period, the core CPI is expected to have risen from 3.8% to 4.0%.
Inflation has an impact on Bitcoin prices. Some analysts view it as an ideal hedge against inflation, meaning that they expect its price to rise as prices rise. Recently, however, the price has struggled to find direction even as US inflation has risen to the highest level in more than a decade.
On the other hand, the BTC/USD pair tends to underperform in a high inflation environment since it leads to higher chances of tightening by the Fed. The FOMC minutes published last week shows that some members were starting to advocate for tapering of asset purchases.
The BTC/USD is also wavering as investors wait for the next unlocking by the Grayscale Bitcoin Trust. The Trust will unlock about 40,000 Bitcoins in the next few days. This is because institutional holders of the trust must hold them for six months before selling. Therefore, the rising liquidity could lead to some weakness for Bitcoin.
Further, the recent crackdown in China seems to be easing. On-chain data show that the Bitcoin hash rate is rising, which is a sign that more miners are coming back online.
BTC/USD Technical Analysis
The four-hour chart shows that Bitcoin has been in a consolidation mode recently. The price has found a major resistance at the 34,000 level where it has struggled to move above several times before. It has also found a support at around 30,000. It also seems to be forming a descending triangle pattern. The pair is also below the 25-day and 50-day moving averages. Therefore, while it is too early to tell, the pair may soon break out lower as bears target the next key support at 30,000.
