Bullish View
Buy the BTC/USD and set a take-profit at 70,000.
Add a stop-loss at 64,000.
Timeline: 1-2 days.
Bearish View
Set a sell-stop at 65,190 and a take-profit at 64,000.
Add a stop-loss at 67,000.
The BTC/USD price soared to an all-time high of more than $68,000 as demand for Bitcoin rose. Bitcoin has jumped by more than 127% this year, bringing its total market capitalization to more than $1.2 trillion. It has outperformed all traditional assets like gold and stocks.
Inflation Hedge?
The BTC/USD pair has jumped sharply partly because of the rising Consumer Price Index (CPI). Some analysts believe that Bitcoin is a viable hedge against inflation.
Recent numbers have shown that the headline US inflation has risen to a 13-year high of 5.3%. The closely-watched personal consumer expenditure (PCE) data rose to the highest level in more 30 years.
Therefore, the BTC/USD is rising as investors wait for the upcoming inflation data. Economists expect the data to show that the US consumer inflation rose by a multi-year high of 5.8%. Core CPI, which excludes the volatile food and energy prices, is expected to have risen to 4.3%.
In addition to inflation being an inflation hedge, it tends to have an impact on monetary policy. With the US unemployment rate falling, and with inflation rising, the Fed has started to tighten its policy. Therefore, today’s inflation will provide more signs for what the Fed will do in the coming months.
Bitcoin is also rising as investors wait for the first network upgrade in four years. The upgrade, which is known as Taproot, will take effect next week after it was approved by miners a few months ago. The upgrade will improve transaction speeds in the network.
It will also unlock the potential for smart contracts. This means that, in the long term, developers will be able to build applications using the network. In most cases, cryptocurrency prices tends to rise ahead of a major upgrade.
BTC/USD Forecast
The BTC/USD pair has been in a strong bullish trend in the past few weeks. It managed to move above the previous all-time high of 66,900. It also moved above the upper side of the small cup and handle pattern.
The pair has also moved above the 25-day and 50-day moving averages while the MACD has moved above the neutral level.
Therefore, for now, the path of the least resistance is to the upside, with the next key level to watch being at 70,000.
